Global share prices have continued to fall sharply on Tuesday amid fears that a recession in the US will lead to a global economic slowdown.
Global share prices have continued to fall sharply on Tuesday amid fears that a recession in the US will lead to a global economic slowdown.
London's main FTSE 100 share index dropped more than 3%, after posting its biggest drop since the September 11 2001 terrorist attacks on Monday.
London's main FTSE 100 share index dropped more than 3%, after posting its biggest drop since the September 11 2001 terrorist attacks on Monday.
Earlier Asian markets had tumbled with Japan's Nikkei index closing down 5.7%, taking its decline this year to 18%.
Earlier Asian markets had tumbled with Japan's Nikkei index closing down 5.7%, taking its decline this year to 18%.
Many analysts are predicting indexes could fall further in coming weeks.
Many analysts are predicting indexes could fall further in coming weeks.
The recent falls were sparked by fears of a US recession after a proposed US stimulus package, which would involve about $145bn (£76bn) in tax cuts to encourage spending, may not be enough.
Dominique Strauss-Kahn, the head of the International Monetary Fund, said the global economic situation was "serious" and that all countries in the world were suffering in the wake of a slowdown in US growth.
Monday saw global stock indexes suffer their biggest slump since the terrorist attacks of September 11 2001.
London's FTSE 100 index tumbled 5.5% to 5,578.2, wiping more than £77bn ($149bn) off the value of its listed shares. It had the biggest points decline since the index was started.
'Remain calm'
In Bombay on Tuesday, India's main index fell 9.8% within minutes, triggering an automatic one-hour halt in trading.
The loss in Indian shares came after a fall of 7.4% on Monday, the Sensex's worst day.
India's Finance Minister P Chidambaram has urged the Indian investors to "remain calm" and advised them to "stay invested".
It basically stems from the United States Hiroko OtaJapanese minister for economic and fiscal policy
Mr Chidambaram said that "enough liquidity will be provided to the brokers to tide over the present crisis".
In China, the main Shanghai Composite Index closed down 7.2% at a five month low, having lost 17% in the past six days of trading.
Trading was also suspended briefly in South Korea as the market dropped more than 6%, while Hong Kong's Hang Seng index lost more than 8%.
South Korean shares dropped by about 5%, with Sydney's market continued its longest losing streak for 26 years, closing down 7.1%.
Global co-operation
The Japanese government said it saw no reason to intervene to support the markets and a Bank of Japan meeting left interest rates unchanged.
"Stock markets across the world are falling and it basically stems from the US," said Hiroko Ota, the minister for economic and fiscal policy.
"It is difficult at the moment to mull action by Japan alone. Instead, we should co-operate globally," she said.
The Brazilian stock market - the largest in the region - fell by 6.6%, while Mexico's IPC index fell 5.4%.
Brazil's real dropped by 2.5% against the dollar, and Mexico's peso lost 0.9% against the US currency, registering a five-month low.
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