World markets continue to fall

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The Independent Online

Stock markets fell sharply around the world today again today because of fears of severe economic repercussions following last week's terrorist attacks.

Stocks on Wall Street fell sharply when it oepened this afternoon with the Dow Jones index losing more than 270 points in morning trading.

Wall Street's losses widened as Federal Reserve Chairman Alan Greenspan confirmed what markets already knew and feared: last week's terrorist attacks have produced a significant drop in economic activity.

The selling was expected after a turbulent session yesterday, when the Dow Jones industrial average fell more than 400 points but recovered to a loss of 144. The market's anxiety increased as Mr Greenspan told Congress the terrorist attack had disrupted the country in a variety of ways.

But the Fed chairman also said, "I am confident that we will recover and prosper as we have in the past."

Shares in Europe and Asia tumbled as continued forecasts of poor corporate earnings together with severe problems for airlines and some insurers adding to the erosion in investor confidence.

"At the moment the 'fear factor' is what's driving the market downward," said David Thwaites, European stock strategist at BNP Paribas.

The three biggest European markets – in London, Frankfurt and Paris – all fell sharply after rallying briefly at the start of trading.

The FTSE index of British blue chips lost 170 points on the London Stock Exchange.

The Xetra DAX index of leading German shares fell 2,89 percent to 3,925.18 on the Deutsche Boerse, and the Paris Stock Exchange's CAC 40 index shed 2.60 percent to 3,787.97.

Prices slipped all around the Asia–Pacific region. Hong Kong, Asia's second largest market, finished with a loss of 2.5 percent by the Hang Seng Index.

On the Tokyo exchange, the 225–issue Nikkei Stock Average fell 154.44 points, or 1.6 percent, to close at 9,785.16.

"You can basically close the book and go somewhere to hide for the next few months," said Song Seng Wun, regional economist for GK Goh Research in Singapore. "I can't really see any good news on the horizon in the near term."

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