Another bloodbath on world stock markets

NEW YORK/LONDON (AFP) - Stock markets around the world again suffered heavy losses Friday, as fear stalked trading floors and frazzled investors looked to a meeting of G7 finance chiefs for salvation.

Stock exchanges were in turmoil after Wall Street opened sharply lower before limping into positive territory, only to plunge again on comments from US President George W Bush.

European shares closely tracked the New York Stock Exchange, going into a frenzied free fall after the start of trade on Wall Street, briefly pulling back and then plummeting.

Asian shares earlier in the day were likewise hammered, with Tokyo giving up more than 9.0pc and Hong Kong 7.2pc.

In New York, the Dow Jones Industrial Average fell 600 points or 7.0pc in afternoon trade to slide under 8,000 points amid a brutal selloff in global markets. The blue-chip index was at 7,978.80 at 1755 GMT.

The Dow had been clawing back lost ground, after an earlier plunge of 7.9pc, until Bush’s remarks appeared to dampen sentiment.

The Nasdaq slid 6.24pc and Standard & Poor’s 500 plunged 7.53pc in an eighth straight day of losses for Wall Street.

Shares in Morgan Stanley were down 41.85pc in New York at $7.24 in early afternoon trading. This makes the whole company worth less than the $9.0b that MUFG has promised to invest in exchange for a minority stake of 21pc. Citigroup rose 5.96pc to $13.70 after throwing in the towel on its plans to buy rival bank Wachovia, but pledging to press its lawsuit for $60b for breach of contract. Wachovia rose 30pc to 4.68 as it prepared to merge with Wells Fargo, up 0.88pc at $27.49.