World stocks take turn for worse

Automotive and finance firms have seen their stock fall

Stock markets have fallen worldwide amid worries over the depth of the financial crisis and persistent problems in the US car industry.

In New York, the Dow Jones slid 3.3% to close down 254.16 points at 7,522.02.

General Motors plunged after President Barack Obama ordered the resignation of boss Rick Wagoner and took a hard line on aid for the car industry.

Germany's Dax fell 5.1%, France's Cac 40 shed 4.3% and the UK's FTSE 100 declined 3.5%. Asian stocks also fell.

European markets were rattled after Spain was forced into its first bank rescue.

France's main faller was Credit Agricole, down 13.3%, while in Germany, the lead decliner was Commerzbank, which fell about 17%.

The falls come after a period of recent gains for most stock markets.

Car rescue

On Monday, the White House announced that it had given ailing car firms Chrysler and GM strict deadlines to further restructure in order to have the chance of receiving further bail-out funding from the government.

The US administration said plans presented by the two firms GM to date did not merit further aid.

Chrysler has 30 days to come up with a new plan while GM has 60 days.

"Perhaps this is simply the reality as capitalism and, in turn, economic growth, is reliant on companies failing as well as succeeding but equities on both sides of the Atlantic have been under pressure throughout the session as a result," said David Fineberg, chief dealer at CMC Markets.

They have already received $14.7bn in bail-outs.

Chrysler has requested a further $5bn while GM says it needs $16.7bn more.

GM shares were down 25% at $2.71. Chrysler is not publicly quoted.

Asia hit

Hong Kong's Hang Seng index fell 4.7% amid concerns about Asia's ability to recover while the US remained weak.

Japan's benchmark Nikkei index fell 4.5% after data showed industrial production slumped in February.

Fears that demand for new cars is still a long way from recovering have hit car makers worldwide.

Nissan fell 7.7%, Honda shed 6.7% and Toyota fell 3.7%.

Finance shares were also hit, with KB Financial Group down 6.5% in Seoul and Mitsubishi UFJ Finance down 8.8% in Tokyo.

Also adding to worries were comments from JP Morgan and Bank of America that business conditions had worsened recently.