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Shares fall on more economy fears Shares fall on more economy fears
(about 1 hour later)
European and Asian shares have fallen sharply as concerns continue about the threat of recession in the US and its impact on the world economy. European and Asian shares have fallen sharply as concerns remain about the threat of recession in the US and its impact on the world economy.
The UK's main FTSE 100 index was down 108 points or 1.8% in morning trading in London, while Germany's Dax had lost 1.6% and France's Cac was down 2.5%. The UK's main FTSE 100 index was down 108 points, or 1.8%, in morning trading in London, while Germany's Dax had lost 1.6% and France's Cac was down 2.5%.
In Japan, the Nikkei 225 had earlier finished the day's trading down 4%.In Japan, the Nikkei 225 had earlier finished the day's trading down 4%.
Analysts said dealers were cautious ahead of an expected interest rate cut from the Federal Reserve on Wednesday. Analysts said investors were cautious ahead of an expected interest rate cut from the Federal Reserve on Wednesday.
Hong Kong's Hang Seng index closed Monday down 4.3%, while Mumbai's Sensex was down 3.5% in afternoon exchanges. Hong Kong's Hang Seng index closed down 4.3%, while Mumbai's Sensex was down 3.5% in afternoon trading.
Monday's falls come after Friday's declines on Wall Street, with the Dow Jones index losing 171 points or 1.4%. Monday's falls came after falls on Wall Street on Friday, with the Dow Jones index ending down 171 points, or 1.4%, at 12,207.2.
'No appetite''No appetite'
Despite the falls, the market mood seemed calmer after last week's ups and downs.Despite the falls, the market mood seemed calmer after last week's ups and downs.
The market appears to have hit bottom last week but it's still not in a position to keep rising, considering various events pending such as the Fed rate decision Koichi Ogawa, Daiwa SB InvestmentsThe market appears to have hit bottom last week but it's still not in a position to keep rising, considering various events pending such as the Fed rate decision Koichi Ogawa, Daiwa SB Investments
Last week saw global equity markets brought down by growing despair over the US economy, only to be later lifted by a $150bn (£76bn) stimulus plan agreed between the US Congress and the Bush administration. The week had begun with sharp stock market falls on growing worries over the US economy, only for them to recover later in the week by a $150bn (£76bn) stimulus plan agreed between the US Congress and the Bush administration.
Francis Lun, general manager at Fulbright Securities in Hong Kong, said the market was "fluctuating wildly".Francis Lun, general manager at Fulbright Securities in Hong Kong, said the market was "fluctuating wildly".
"Investors don't have the appetite to buy stocks now," he was quoted by AFP news agency as saying. "Investors don't have the appetite to buy stocks now," he was quoted as saying by the AFP news agency.
"The market appears to have hit bottom last week but it's still not in a position to keep rising, considering various events pending such as the Fed rate decision," said Koichi Ogawa, chief portfolio manager at Daiwa SB Investments in Tokyo."The market appears to have hit bottom last week but it's still not in a position to keep rising, considering various events pending such as the Fed rate decision," said Koichi Ogawa, chief portfolio manager at Daiwa SB Investments in Tokyo.
The Fed, America's central bank, is widely expected to cut US interest rates to 3.25% when it makes its next scheduled decision on Wednesday. Uncertainty
Many analysts are expecting the Federal Reserve, the US's central bank, to cut interest rates again when it makes its next scheduled decision on Wednesday.
Last week it reduced rates to 3.5% from 4.25% in an emergency move.Last week it reduced rates to 3.5% from 4.25% in an emergency move.
Analysts are also waiting for any further economic details in President Bush's State of the Union address late on Monday.
"There's a lot of uncertainty out there: uncertainty over the US economy, uncertainty over China's economy," said Rob Hart, an analyst with Morgan Stanley in Hong Kong.
"People are also worried about contagion in Europe," he added.
"If the US slows down, will it trigger a slowdown in Europe?"