World stock markets fall

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Source: CCTV.com | 01-22-2008 08:56

European stocks nose dived Monday in a global market rout on concerns the US might be heading for a recession.

European stocks nose dived Monday in a global market  rout on concerns the US might be heading for a  recession. (CCTV.com)

Analysts say investors are now faced with the prospect of a bear market and should brace for more of a downside.

Investors have been dumping shares because they are skeptical an economic stimulus plan US President George W. Bush announced on Friday will shore up an economy battered by problems in its housing and credit markets.

The plan calls for about 145 billion US dollars worth of tax relief to encourage consumer spending.

Markets have been facing mounting pressures from signals the recent credit crisis could send the US into recession.

Investors remain nervous about the likelihood slowing growth will pare back earnings on both sides of the Atlantic.

In Europe, Germany's DAX suffered the heaviest losses, down over 7 percent. The UK benchmark FTSE-100 dropped 5 and a half percent. France's CAC-40 Index plunged almost 7 percent.

Germany's DAX suffered the heaviest losses, down over 7 percent. (CCTV.com)

Asian markets were also hit hard. India's benchmark stock index tumbled over 7 percent. Hong Kong's blue chip Hang Seng Index plunged 5 and a half percent.

And Japan's benchmark Nikkei index slid almost 4 percent. Other main Asian indices also ended 3 to 8 percent lower than the previous trading day.

Christoph Schmidt, Analyst of N.M Fleischhacker Trading Bank, said, "There is a lot of panic selling today. Most investors worked on the wrong foot. The Asian markets were pretty weak today, this morning. And all the selling pressure came over to Europe. And traders began to react emotionally to the markets."

Analysts say the coming days will be crucial. Investors are waiting for the US markets' reaction to the heavy selling pressure from Asian markets.

US markets were closed Monday for a public holiday.

Editor:Zhang Pengfei