Stock markets plunge on Asia worries

Hong Kong tumble: Investors watch anxiously as the stock market drops more than 5%

Share prices around the world have slumped, hit by continued worries about Asia's economic crisis.

In London the FTSE 100 index fared rather better than most markets.

Share prices slipped immediately after opening, taking their cue from big declines on Wall Street overnight and follow-through losses in Asia.

The FTSE 100 closed at 5870.2 - down 100.5 points or 1.7%, but above the low of 5836.9 mid-afternoon.

In all, shares on London's leading index lost some £18bn.

Frankfurt and Paris hit hard

Stockmarkets in Paris and Frankfurt followed a similar pattern.

In Germany, the Dax index lost a hefty 2.7% and ended the day down 181.85 at 5458.04 points.

Analysts said the market was under pressure from international influences and that negative sentiment combined with profit-taking after recent record gains sent all major German shares lower.

In Paris, traders said the dollar's weakness against the French franc and the sell-offs at other bourses had been an excuse to book profits after two consecutive record-breaking sessions.

The CAC-40 finished at 4017.37, down 98.51. French stocks managed to pull away from the day's lows, but still lost 2.4% on the day.

Hong Kong stocks in trouble

Compared to losses in Asia, Europe's stock markets fared rather well.

Hong Kong's investors saw share prices in free-fall.The Hang Seng index closed at 8,9383.43 - a one-day loss of 498.78 points or 5.3%.

Investors bailed out, spooked by a price war among the territory's property developers and fears that Hong Kong's economy is about to enter a serious recession.

Late on Tuesday, Chief Executive Tung Chee-hwa had made the most pessimistic comments yet by a government official, saying that Hong Kong's economy had to adjust from a bubble of high property prices, inflation and interest rates.

Shares also fell sharply in Thailand as 4% was wiped off their value.

Less spectacular, but still large were the falls in Tokyo. The Nikkei index lost 1.4% or more than 220 points to close at 15,664.29. The general mood was made even gloomier by the news that ratings agency Moody's had downgraded the credit-worthiness of five major Japanese banks.