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US concerns prompt market falls US concerns prompt market falls
(11 minutes later)
Global shares have fallen sharply with London's FTSE 100 index heading towards its lowest close since October 2005.Global shares have fallen sharply with London's FTSE 100 index heading towards its lowest close since October 2005.
A sell-off in Asia hit Hong Kong's Hang Seng index, down 4%, while Japan's Nikkei index lost 2% and Chinese shares fell 3%. London's FTSE 100 lost 1.2%.A sell-off in Asia hit Hong Kong's Hang Seng index, down 4%, while Japan's Nikkei index lost 2% and Chinese shares fell 3%. London's FTSE 100 lost 1.2%.
Analysts blamed mounting concerns about the health of the US economy and its impact on the rest of the world, and the effect of slow growth on earnings.Analysts blamed mounting concerns about the health of the US economy and its impact on the rest of the world, and the effect of slow growth on earnings.
US plans to bail out two key mortgage lenders have also unnerved investors.US plans to bail out two key mortgage lenders have also unnerved investors.
The government-backed rescue of Freddie Mac and Fanny Mae - in the aftermath of the collapse of another lender IndyMac - had initially been well received but analysts say optimism appears to have faded. The government-backed rescue of Freddie Mac and Fannie Mae - in the aftermath of the collapse of another lender IndyMac - had initially been well received but analysts say optimism appears to have faded.
"Sentiment is really fragile," said Louis Wong, of Phillip Securities in Hong Kong."Sentiment is really fragile," said Louis Wong, of Phillip Securities in Hong Kong.
"Investors are worried that there might be more bank failures, especially small banks in the United States.""Investors are worried that there might be more bank failures, especially small banks in the United States."
Asia exposureAsia exposure
In the UK, the FTSE 100 hit its lowest level since 2005 before rebounding slightly - with banks including Royal Bank of Scotland among the biggest fallers.In the UK, the FTSE 100 hit its lowest level since 2005 before rebounding slightly - with banks including Royal Bank of Scotland among the biggest fallers.
The financial sector in Germany was also hit where the Dax index lost 1.7%.The financial sector in Germany was also hit where the Dax index lost 1.7%.
Germany's leading index is heading for for its lowest close since October 2006, as a survey suggesting that investor confidence was at a record low was released.Germany's leading index is heading for for its lowest close since October 2006, as a survey suggesting that investor confidence was at a record low was released.
Meanwhile France's Cac 40 index, down 1% on the day, faced its worst finish in more than three years.Meanwhile France's Cac 40 index, down 1% on the day, faced its worst finish in more than three years.
Of the Asian losses, banks were the hardest hit as investors worried that US financial market woes would spill over to Asia.Of the Asian losses, banks were the hardest hit as investors worried that US financial market woes would spill over to Asia.
In Japan, Mitsubishi UFJ Financial and Mizuho Financial Group both lost 5% over worries about their exposure to debt issued by Fannie Mae and Freddie Mac - who issue about half of all US mortgages.In Japan, Mitsubishi UFJ Financial and Mizuho Financial Group both lost 5% over worries about their exposure to debt issued by Fannie Mae and Freddie Mac - who issue about half of all US mortgages.
These losses took Japan's Nikkei index 255.60 points lower to finish at 12,754.56 - the first time it has closed below 13,000 since 15 April.These losses took Japan's Nikkei index 255.60 points lower to finish at 12,754.56 - the first time it has closed below 13,000 since 15 April.
And in Hong Kong, China's top lender ICBC fell 4.3% and China Construction Bank lost 4.5%.And in Hong Kong, China's top lender ICBC fell 4.3% and China Construction Bank lost 4.5%.