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Global Markets Continue to Slide as Recession Fears Mount


Following big losses in Asia, Europe is faring little better on equity markets. Persistent recession fears and new layoff announcements are contributing to the gloom as VOA's Tom Rivers reports from London.

Current bad economic news seems to be echoing around the world one time zone at a time.

At issue, serious concerns that the world is entering what may be a protracted downturn that few will be immune from.

With the Dow index dropping five percent in New York on Wednesday to below the psychologically important 8,000 level, Asian markets picked up on that gloom and "down" was the byword there.

In Tokyo, the Nikkei lost nearly seven percent as Japanese October exports took a 7.7 percent drop.

In Hong Kong, the Hang Seng index closed more than four percent down.

In Europe, that same sentiment prevails.

Stockbroker Richard Hunter, from London's Hargreaves-Lansdown, says the latest Federal Reserve report forecasting lower U.S. economic growth next year coupled with the major money problems facing the big three American automakers is being felt around the world.

"That then fed into Asia because of course a lot of Asian economies are dependent on the U.S. in terms of their own exports, needless to say in the U.K. and indeed in Europe this morning that fed through once more," he said. "A lot of Footsie [Financial Times]-100 companies for example either have dollar-denominated earnings or indeed that are dollar-facing."

Hunter says the current mood is that new lows will continue to be probed.

"It is yet another example of sellers pushing against an open door and in terms of investors being risk-averse, they are choosing to go towards things like bonds and perhaps gold again as opposed to equities," he said.

In addition to the dropping stock indexes, rising unemployment is rearing its head in various countries.

In Japan, Isuzu Motors says 1,400 contract workers will be let go.

European carmaker Peugeot-Citroen has announced that 2,700 workers will be laid off.

And in Britain, aircraft engine maker Rolls-Royce says it plans to cut 2,000 jobs next year as worldwide demand for its products continues to ebb in this time of global economic downturn.

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