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Markets slide on inflation fears Markets slide on inflation fears
(about 4 hours later)
Inflation worries, near-record oil prices and fears of further bank losses have led to a sell-off of shares across global stock markets.Inflation worries, near-record oil prices and fears of further bank losses have led to a sell-off of shares across global stock markets.
Key share indexes in India and China both fell 3% while Japan's main index fell for its ninth consecutive day for the first time in four years.Key share indexes in India and China both fell 3% while Japan's main index fell for its ninth consecutive day for the first time in four years.
In Europe, the FTSE 100 fell 2% while Paris and Frankfurt saw similar losses. In Europe, the FTSE 100 fell 2.6% while the Cac40 fell 2.1% and the Dax 1.6%.
Lack of confidence also hit US markets, with the Dow Jones Industrial Average opening down more than 100 points. Lack of confidence also hit US markets, with the Dow Jones Industrial Average down 125 points in early trading.
Banking and airline shares were especially weak, the former hit by talk of further sub-prime related losses. Banking, airline and mining shares were especially weak, the former hit by talk of further sub-prime related losses.
Bank rumoursBank rumours
Swiss bank UBS, which has been one of the biggest victims of the widespread financial crisis caused by the US housing slump, reshuffled its management on Tuesday.Swiss bank UBS, which has been one of the biggest victims of the widespread financial crisis caused by the US housing slump, reshuffled its management on Tuesday.
This sparked speculation that the firm, which has announced plans to cut more than 5,000 jobs, could be set to announce further losses from failed mortgage-backed investments.This sparked speculation that the firm, which has announced plans to cut more than 5,000 jobs, could be set to announce further losses from failed mortgage-backed investments.
It has already incurred losses of more than $37bn.It has already incurred losses of more than $37bn.
We haven't hit the bottom yet... investors are still pessimistic at this point Zhang Xiuqi, Guotai Junan Securities Follow key share indicesWe haven't hit the bottom yet... investors are still pessimistic at this point Zhang Xiuqi, Guotai Junan Securities Follow key share indices
"There is more concern coming back in on the banking sector again," said Andrea Williams, head of European equities at Royal London Asset Management."There is more concern coming back in on the banking sector again," said Andrea Williams, head of European equities at Royal London Asset Management.
"There are a lot of rumours about writedowns.""There are a lot of rumours about writedowns."
In London, the FTSE 100 index was down 140.7 points at 5,485.2 by early afternoon.
Banks and airline stocks were particularly weak, with British Airways down nearly 5% after oil prices rebounded back above $142 a barrel.
Air France shares fell 3.4% in Paris, contributing to a 105.31 point drop in the benchmark Cac 40 index to 4,329.54.
In Frankfurt, the Dax index was down 131.71 points at 6,286.61.
Earlier, Asian stock markets were hit by concerns that rising inflation, stoked by higher prices for oil and raw materials, would eat into company profits and slow economic growth.Earlier, Asian stock markets were hit by concerns that rising inflation, stoked by higher prices for oil and raw materials, would eat into company profits and slow economic growth.
In India, where inflation is at a 13-year high, the main Sensex index in Bombay slid 3.7% to 12,961.68. Shanghai's main index. meanwhile, fell 3.1% to 2,651.6, a 16-month low.In India, where inflation is at a 13-year high, the main Sensex index in Bombay slid 3.7% to 12,961.68. Shanghai's main index. meanwhile, fell 3.1% to 2,651.6, a 16-month low.
"We haven't hit the bottom yet," warned Zhang Xiuqi, from Guotai Junan Securities."We haven't hit the bottom yet," warned Zhang Xiuqi, from Guotai Junan Securities.
"That is because investors are still pessimistic at this point.""That is because investors are still pessimistic at this point."
Losses in Japan were limited despite the closely watched Tankan survey of corporate prospects showing that business confidence had fallen to a five-year low. Losses in Japan were limited despite the closely-watched Tankan survey of corporate prospects showing that business confidence had fallen to a five-year low.