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Markets thumped

Markets thumped
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First Published: Wed, Jan 23 2008. 12 45 AM IST

Tuesday tumble
Tuesday tumble
Updated: Wed, Jan 23 2008. 12 45 AM IST
Tokyo: Global stock markets extended their slide for a second day on Tuesday, plunging amid fears that a possible US recession will cause a worldwide economic slowdown. The dramatic declines in Asia and Europe so far this week were expected to spread to Wall Street, where stock index futures were already down sharply hours before the trading day began.
Japan’s Nikkei 225 index nosedived 5.7% its biggest percentage drop in nearly 10 years, to 12,573.05, a day after falling 3.9%. Australia’s benchmark index sank 7.1%—its steepest one-day slide in nearly 20 years.
Hong Kong’s Hang Seng, which slumped 5.5% on Monday, finished down 8.75%. In China, the Shanghai Composite index lost 7.25% to 4,559.75—its lowest close since August.
Tuesday tumble
India’s finance minister P. Chidambaram urged investors to remain calm after trading in Mumbai was halted for an hour when the stock market there fell 10% within minutes of opening. The Sensex rebounded some to close down 5% after plunging 7.4% on Monday. “There is no reason at all to allow the worries of the Western world to overwhelm us,” Chidambaram said.
European markets, which fell sharply on Monday, were volatile on Tuesday. By mid-morning, the UK’s FTSE 100 had slipped 1%, Germany’s DAX had dropped 2.9%, while France’s CAC 40 declined 1.1%.
Investors have dumped shares in frenetic trading over the last two days on worries that the US economy, battered by a credit crisis and housing slump, will shrink in coming months, weakening demand for exports. There is also scepticism that US authorities will be able to prevent a recession. The Federal Reserve on Tuesday cut its target for the federal funds rate 75 basis points to 3.5%, and US President George W. Bush has proposed an economic stimulus package that includes $145 billion (Rs5.71 trillion) in tax cuts, but investors around the world are doubtful that the measures will lift the economy quickly.
Ramola Talwar Badam in Mumbai and Cassie Biggs in Hong Kong contributed to this story.
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First Published: Wed, Jan 23 2008. 12 45 AM IST