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Stock markets fall on US worries Stock markets fall on US worries
(about 5 hours later)
European and Asian stock markets have fallen as investors continue to worry about a possible US recession. Stock markets worldwide have fallen as investors continue to worry about a possible US recession.
All the main markets fell, with London's benchmark FTSE 100 index down 1.5% at 5,795.4 in early trade. German and French indexes dropped 1.5%. Wall Street shares edged modestly lower in early New York trade, with the Dow Jones index down 0.4% after a 2.5% drop on Friday, which stoked the falls.
Earlier, Tokyo's Nikkei index tumbled 4.5%, while India's Sensex index shed as much as 5%. The UK's FTSE 100 index was down 1% at 5,825.6, while Germany's Dax dropped 1.4% and France's Cac fell 1.3%.
A raft of gloomy US economic data on Friday sent Wall Street's Dow Jones down 2.5% and prompted the falls. Earlier, shares across Asia, excluding China's mainland market, were hit after the bleak US economic data on Friday.
Weak US consumer spending figures, gloomy comments from Federal Reserve chairman Ben Bernanke and disastrous results at insurer American International Group (AIG) helped to unnerve investors. Tokyo's Nikkei index tumbled 4.5%, while India's Sensex index shed as much as 5%.
Weak US
Weak US consumer spending figures, gloomy comments from Federal Reserve chairman Ben Bernanke and disastrous results at insurer American International Group (AIG) have helped to unnerve investors.
There is even a growing view that the US has already entered into a recession Ryohei Muramatsu, Commerzbank analystThere is even a growing view that the US has already entered into a recession Ryohei Muramatsu, Commerzbank analyst
HSBC, the last of the UK's "big five" banks to report annual results, warned that its future looked uncertain, despite reporting that profit rose 10% to $24.2bn in 2007.HSBC, the last of the UK's "big five" banks to report annual results, warned that its future looked uncertain, despite reporting that profit rose 10% to $24.2bn in 2007.
Banks and financial firms were the biggest fallers across Europe, with UK's HBOS falling more than 5%, and hedge fund group Man down 4%.Banks and financial firms were the biggest fallers across Europe, with UK's HBOS falling more than 5%, and hedge fund group Man down 4%.
"The medium term is very difficult to predict as there are a lot of unanswered questions around banks' balance sheets," said Thierry Lacraz, strategist at Swiss bank Pictet."The medium term is very difficult to predict as there are a lot of unanswered questions around banks' balance sheets," said Thierry Lacraz, strategist at Swiss bank Pictet.
Market moves Exporters suffer
The UK's FTSE 100 index shed 88.9 points, or 1.5%, to 5,795.4. Earlier on Monday, shares fell across Asia on concerns that flagging US consumer demand would hurt profits at the region's exporters, which are some of the region's biggest employers.
Germany's Dax fell 1.4% to 6654.7, and France's Cac index was down 1.3% at 4,726.1.
Earlier, shares fell across Asia on concerns that flagging US consumer demand would hurt profits at the region's exporters, which are some of the region's biggest employers.
Shares were also hurt by a weakening dollar, amid fears that it will cut the value of exporters' foreign earnings.Shares were also hurt by a weakening dollar, amid fears that it will cut the value of exporters' foreign earnings.
The dollar fell to its lowest level against the yen for three years. In early trading in Tokyo it was as low as 102.90 yen, before recovering to 103.20 yen. The dollar fell to its lowest level against the yen for three years. In early trading in Tokyo it was as low as 102.90 yen and it fell to that level again in afternon Europe trade.
Japan's main Nikkei 225 index closed down 610.84 points at 12,992.18, its lowest level for six weeks, with carmakers Toyota and Honda bearing the brunt of the sell-off.Japan's main Nikkei 225 index closed down 610.84 points at 12,992.18, its lowest level for six weeks, with carmakers Toyota and Honda bearing the brunt of the sell-off.
"What you have seen in Japan reflects in part the strength of the currency. When the currency goes up sharply in an exporting nation, that is pretty bad for the shares," Charlie Morris from HSBC Investments told the BBC.
Shares in car maker Honda fell 5.8% to 3,070 yen, and rival Toyota's shares were 3.3% down at 5,560 yen.
"Investor fears of a US recession have strengthened. There is even a growing view that the US economy has already entered into a recession," said Ryohei Muramatsu of Commerzbank in Tokyo.
In Hong Kong, the benchmark Hang Seng index ended the day down 3.1% at 23,584.97, while India's benchmark Sensex dropped 939 points to 16,639.54.