Drowning in a sea of red (21-01-2008)

The U.S. government's stimulus plan did nothing to dispel investors’ pessimism over the possibility of a recession in the United States, and Wall Street ended the session down on Friday.

Starting the week on a downward trend, Asian stock markets fell sharply on Monday pulled down by last week’s declines on Wall Street. Leading losses were financial stocks, while energy issues added their downward momentum.

Benchmarks such as the Hang Seng tumbled more then 5.5%, while the Asia Pacific region followed with the Nikkei down more than 3.5%, as financials were battered and posted heavy losses, led by Sumitomo, which ended the trading day over 7% down.

By late morning, European shares were in free fall led by the financials sector. Major indices were down from 3.5 to 6% with everything on the board looking red. This picture has not been seen in over four years and it could well be the beginning of a bear market in the region as the economic developments across the Atlantic begin to affect global markets.

The U.S. is closed today for Martin Luther King day.

Source: ISFM