Stocks fell sharply worldwide Monday following declines on Wall Street last week amid investor pessimism over the U.S. government's stimulus plan to prevent a recession.
U.S. markets were closed for Martin Luther King Jr. Day, but the downbeat mood from last week's market declines there circled through Europe, Asia and the Americas.
Investors dumped shares because they were skeptical that an economic stimulus plan President Bush announced Friday would shore up the economy that has been battered by problems in its housing and credit markets. The plan, which requires approval by Congress, calls for about $145 billion worth of tax relief to encourage consumer spending.
"It's another horrible day," said Francis Lun, a general manager at Fulbright Securities in Hong Kong. "Today it's because of disappointment that the U.S. stimulus (package) is too little, too late and investors feel it won't help the economy recover."
On Monday, Britain's benchmark FTSE-100 slumped 5.5 percent to 5,578.20, France's CAC-40 Index tumbled 6.8 percent to 4,744.15, and Germany's blue-chip DAX 30 plunged 7.2 percent to 6,790.19.
In Asia, India's benchmark stock index tumbled 7.4 percent, while Hong Kong's blue-chip Hang Seng index plummeted 5.5 percent to 23,818.86, its biggest percentage drop since the Sept. 11, 2001, terror attacks, the AP reports.
India 's Sensex was the biggest loser of the day, plummeting 1,408.35 points, or 7.4%, to 17,605.35 during the session. Earlier in the day, the index had tumbled nearly 11% to 6,951.50, registering its highest percentage fall in a single day, before recovering.
Arun Kejriwal, director at KRIS Capital in Mumbai, attributed the day's events to a combination of factors, including the exit by leveraged positions by some investors, weak regional markets and selling by foreign investors.
"The market fell sharply and that in turn triggered stop-losses across the board," said Kejriwal.
Deven Choksey, managing director at K.R. Choksey Shares & Securities, said the fall was also due to technical problems, where the stock exchanges temporarily closed down the trading terminals of some brokers due to shortage of funds in their accounts, MarketWatch reports.
Choksey said several broker terminals were closed during the day as funds transfers were delayed over the weekend because of a "systemic problem."
When the leaders of the two great nations were discussing the fate of the world, journalists were analysing their vehicles and airplanes