Recession fears weigh on markets

Asian stocks end lower as major economic powers brace for a slowdown.

    Deepening fears of a global recession continue to drive share prices down [EPA]

    However, Britain's main share index edged higher early on Thursday, ending a two-day losing run, as banks and energy stocks rebounded.

    By 0757 GMT, the FTSE 100 was up 26.08 points, or 0.7 per cent at 4,066.97 in a volatile session after falling as much as one per cent.

    The UK benchmark is down nearly 37 per cent for the year.

    Asia-Europe meeting

    The volatilty in world markets continued as European and Asian leaders gathered for the Asia-Europe Meeting in China, to discuss measures to counter the global financial crisis.

    And the White House announced on Wednesday that George Bush, the US president, was to host a meeting of world leaders to discuss the crisis on November 15.

    The Dow Jones Industrial index closed down 513 points, or 5.7 per cent, at 8,519 on Wednesday after similar slumps in European and Latin American markets.

    The euro and the British pound also plunged to new lows, with the euro closing at $1.28 and the pound at $1.63 amid growing fears of a recession in Europe.

    Gordon Brown, the British prime minister, acknowledged for the first time on Wednesday that the world economic downturn is likely to cause a recession in the UK, the US and other countries.

    Global crisis summit

    IN DEPTH

    How the financial bubble burst

    Q&A: The US financial meltdown

    Reacting to the financial crisis

    Wall Street gripped by uncertainty

    Bush plans to invite members of the G20 group of nations to the summit, which includes the G7 major industrial economies plus key "emerging-market" countries such as China, India and Brazil.

    Dana Perino, a White House spokeswoman, said on Wednesday: "The leaders will review progress being made to address the current financial crisis, advance a common understanding of its causes and, in order to avoid a repetition, agree on a common set of principles for reform of the regulatory and institutional regimes for the world's financial sectors."

    Perino also said that the administration would seek input from the winner of the US presidential election, which will take place on November 4.

    "The summit will also provide an important opportunity for leaders to strengthen the underpinnings of capitalism by discussing how they can enhance their commitment to open, competitive economies, as well as trade and investment liberalisation," the White House said.

    European leaders had pushed for a summit before the end of the year and suggested that an overhaul of the financial system should be considered.

    SOURCE: Agencies


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