Financial Market

Global stock markets have tumbled today; with European indexes recording some of the biggest loses in recent years, and worst early January trading since records began on the back of growing fears of recession hitting the US.

Indexes in Europe fell as much as 7% after huge a sell off in Asia leading to the biggest single days trading losses in recent years. The selling started in Sydney where stocks fell 3% recording their 11th straight decline, spurring the way for Asian markets to follow suit.

Hong Kong’s Hang Sang index recorded its biggest fall since 9/11 falling 5.5%, with losses of between 3% and 7% seen in India, China, Britain, France and Germany.

In afternoon trading, the Dow Jones Euro Stoxx 50 was down 5.7 percent. The CAC 40 index in Paris was down 5 percent, having fallen more than 7 percent at one point. The Dax 30 in Frankfurt was down 6.25 percent, and the FTSE 100 in London was down 3.7 percent.

US markets are shut today due to public holiday, but more losses are expected tomorrow after an announcement by President Bush on a $145 billion stimulus package to encourage more consumer spending failed to lift markets on Friday.

Many are of the opinion that the stimulus package plan announced by President Bush may not be enough to prevent a recession, and investors will find it hard to argue that recession will not affect world markets after today’s trading.

“Investors in Asia have been in a state of denial about the possibility of a recession in the United States. But now there’s no debate about it.” - Adrian Mowat, chief strategist for JPMorgan in Asia

And there may be even more losses in Asia still to come, particularly as banks report the fallout from their investments in the United States mortgage market.