Asian and Russian economic woes send Nasdaq tumbling

Fears that Russia would devalue the rouble and more Asian jitters caused a severe drop in Nasdaq stocks yesterday, with the composite index dropping nearly 23 points.

Cisco was particularly affected, losing around $2bn during yesterday's trading. The company was not prepared to comment on the situation. Chip companies also suffered with Intel losing $500m.

Alan Line, chairman of the International Equity Dealers Association, explained the drop in terms of ongoing uncertainty in the Asian markets. "UK stocks were affected overnight," he told Silicon News. "It's all to do with sentiment - any change is having a bad effect on stocks at the moment. No one knows why the Asian crisis should suddenly start affecting us now."

Kitty Ussher, analyst for transition regions at the Economist Intelligence Unit (EIU), said: "Communications technology is booming in Russia, especially the mobile phone industry. Russia is already integrated into the global economy, so worries about devaluation will have a huge impact on most international companies.

"The EIU is not yet forecasting a devaluation, although there are large risks that people's fears will be realised," she added.