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Economy worries hit global shares | Economy worries hit global shares |
(about 2 hours later) | |
Global stocks have fallen sharply on fears the global financial sector could take a further turn for the worse. | Global stocks have fallen sharply on fears the global financial sector could take a further turn for the worse. |
In Europe, the UK's FTSE 100 fell by 4.2%, while Germany's Dax was down 2.8% and France's Cac 40 lost 3.6%. | |
Earlier in Asia, Japan's Nikkei index closed down 3.8% at 7,280.15, and Hong Kong's Hang Seng index fell 3.9%. | |
Confidence was hit by a fresh $30bn bail-out of US insurance giant AIG, and news that UK bank HSBC aimed to raise £12.5bn from its shareholders. | |
HSBC, Europe's biggest bank, said it would use the money raised from the rights issue to help the bank cope with the effects of the global economic downturn. | |
The bank also said pre-tax profits for 2008 were $9.3bn (£6.5bn), down 62% on the previous year after it wrote down the value of US assets by more than $10bn. | |
"The big issue [for markets] is the fact that HSBC - one of the biggest and strongest banks around - is having such problems," said Jonathan Jackson and Killik & Co. | |
"It's difficult to see any trigger for an upturn in the short term," he added. | |
Meanwhile, US insurance giant AIG announced a record corporate loss of $62bn in the fourth quarter. | |
Gloomy news | Gloomy news |
Weak manufacturing figures in both the UK and eurozone also placed downward pressure on European markets. | Weak manufacturing figures in both the UK and eurozone also placed downward pressure on European markets. |
You're seeing the US is sinking lower and lower, and we're still desperately searching for a bottom John Mar, Daiwa Securities SMBC Co | |
The Purchasing Managers' Index (PMI), compiled by research group Markit, showed that manufacturing activity fell in February compared with the previous month. | The Purchasing Managers' Index (PMI), compiled by research group Markit, showed that manufacturing activity fell in February compared with the previous month. |
"Once again, the extreme weakness in manufacturing activity in February was widespread across the eurozone, with all countries seeing a very sharp contraction in activity," said Howard Archer at IHS Global Insight. | "Once again, the extreme weakness in manufacturing activity in February was widespread across the eurozone, with all countries seeing a very sharp contraction in activity," said Howard Archer at IHS Global Insight. |
The figures were particularly badly received because manufacturing activity in both the UK and the eurozone rose slightly in January. | The figures were particularly badly received because manufacturing activity in both the UK and the eurozone rose slightly in January. |
Weak growth | |
In Asia, weak economic data from China and South Korea underscored fears about the region's export-dependent economies. | In Asia, weak economic data from China and South Korea underscored fears about the region's export-dependent economies. |
China's manufacturing sector declined further last month, while South Korean imports and exports also slumped. Japan reported a steep drop in car sales. | China's manufacturing sector declined further last month, while South Korean imports and exports also slumped. Japan reported a steep drop in car sales. |
Monday's shares slide followed a poor performance on Wall Street on Friday after data showed that US economic growth was even weaker than thought. | Monday's shares slide followed a poor performance on Wall Street on Friday after data showed that US economic growth was even weaker than thought. |
"The Tokyo market is being hit directly by the lower share prices overseas," said Toshihiko Matsuno, research head at SMBC Friend Securities. | "The Tokyo market is being hit directly by the lower share prices overseas," said Toshihiko Matsuno, research head at SMBC Friend Securities. |
John Mar, co-head of sales trading at Daiwa Securities SMBC Co. said: "You're seeing the US is sinking lower and lower, and we're still desperately searching for a bottom." | John Mar, co-head of sales trading at Daiwa Securities SMBC Co. said: "You're seeing the US is sinking lower and lower, and we're still desperately searching for a bottom." |