AFP

March 3, 2008

Stock markets in Europe and the United States had sunk late last week following signs that the fallout from the US credit crisis was far from over.

European equities dived on Monday after heavy falls earlier in Asia as markets were gripped by growing concern that the US economy was slipping into recession, dealers said.

Stock markets in Europe and the United States had sunk late last week following signs that the fallout from the US credit crisis was far from over.

In late morning European trade on Monday, Frankfurt, London and Paris stock markets chalked up fresh losses of about 1.5 percent.

Asian stocks plunged earlier Monday with Tokyo ending down almost 4.5 percent, Hong Kong tumbled 3.07 percent and Seoul gave up 2.3 percent. Singapore and Sydney both shed about 3.0 percent.

“Not a great start to the week with the UK following falls in the US Friday and Asia today,” said Mike Lenhoff, strategist at brokerage Brewin Dolphin.

“What matters most to investors is what is happening in the US. Investors view the US as in recession or going into recession which is not good news for corporate earnings and the market.”

London’s FTSE 100 index of top companies shed 1.32 percent to 5,806.70 points. Frankfurt’s DAX 30 slid 1.51 percent to 6,646.08 points and the Paris CAC 40 lost 1.33 percent to 4,727.09.

In the foreign exchange market, the euro stood at 1.5174 dollars, after striking a record high 1.5239 last Friday.

The European banking sector took a big hit amid fresh credit crunch fears, with giant HSBC announcing more than 17 billion dollars in losses linked to the US housing sector in 2007.

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