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Shares slump on worries over US Global shares tumble on US fears
(about 1 hour later)
European stock markets have suffered sharp losses amid growing fears of a recession in the US. Global stock markets have tumbled, with European indexes heading for their worst day in four years, amid growing fears of a recession in the US.
By 1010 GMT, London's FTSE-100 index was down 1.6%, in Paris the Cac-40 fell more than 3% and in Frankfurt the Dax was down almost 3%. London's FTSE-100 index fell 3.2% to 5685.2, in Paris the Cac-40 fell 4.5%, and Frankfurt's Dax dropped 5.4%.
It was a gloomy Monday in Tokyo too, as the Nikkei fell by 3.9% to its lowest close since October 2005. Tokyo's Nikkei 225 index fell by 3.9% to its lowest close since October 2005, while India's Sensex shed 7.4%.
The markets have taken little comfort from measures to boost the US economy proposed by President Bush on Friday. Investors have taken little comfort from emergency economic measures proposed by President Bush on Friday.
The state of the US economy is very important to Asia's biggest companies because American consumers are some of their top customers. 'Panic mode'
In Mumbai stocks were also hit, the Sensex index fell 1,408 points or 7.4%, adding to an 8% fall last week. The worry is that tax breaks and spending measures will do little to boost consumer spending in the US because of problems in the housing market.
The Hang Seng slumped 1,383.0 points, or 5.5%, to close at 23,818.9, Many shoppers are struggling under higher mortgage repayment costs, and default rates have surged.
At the same time, banks have had to become more careful about who they lend to because they have lost billions of pounds on investments linked to the US housing and mortgage markets.
The state of the US economy is very important to many of Europe's and Asia's biggest companies as it is one of their biggest export markets.
Any slowdown in demand is likely to hurt corporate profit growth, and push share prices even lower, analysts warned.
"It's becoming more and more difficult as the market is now in panic mode," said Hugues Rialan of Robeco France.
"We're falling back into the crisis of confidence in the financial sector.
"The banks have been reassuring the market over their exposure to US mortgage-related investments, but now we realise there is nothing reassuring about it," he said.
Global trend
Markets in China, India, South Korea, Singapore, Taiwan and the Philippines all ell.
In Mumbai, the main Sensex index fell 1,408 points, or 7.4%, adding to an 8% fall last week.
Hong Kong's Hang Seng slumped 1,383.0 points, or 5.5%, to close at 23,818.9,
Australia's benchmark ASX 200 index closed down 2.9% or 166.9 points at 5,580.4, which is its lowest level for a year.Australia's benchmark ASX 200 index closed down 2.9% or 166.9 points at 5,580.4, which is its lowest level for a year.
It was also the 11th consecutive negative day for the index, which has not happened for more than 25 years. It was also the 11th consecutive negative day for the index, the longest losing streak in more than 25 years.
Markets in China, India, South Korea, Singapore, Taiwan and the Philippines also fell.