European stocks have joined a global sell-off after concerns about the US economy and mortgage industry hurt markets in Asia and dented Wall Street.
The UK\'s FTSE tumbled 110.4 points, or 1.8%, to 6,050.8. Earlier, Japan\'s Nikkei index closed 2.9% lower, and New York\'s Dow Jones index ended down 2%. Indexes in Hong Kong, Malaysia, India and Australia fell more than 2%. The sell-off comes as stocks were starting to recover from a sharp slump that rocked markets late last month. Analysts said that market volatility was likely to continue, and any recovery would be short-lived. Although analysts said Asia\'s leading economies remained fundamentally strong, markets across the region are particularly sensitive to signs of a possible economic slowdown in the US.
The US economy, by far the world\'s biggest, is a key export market for Asian companies. This latest round of selling has been sparked by concerns over the US sub-prime mortgage market. Sub-prime lenders target consumers with poor credit histories and they have been hit by an increase in defaults and bad loans. Figures have shown that late mortgage payments and home repossessions in the US had hit their highest level since records began. New Century, the second-biggest sub-prime mortgage lender in the US, is seen by many observers to be close to bankruptcy and the fear among investors is that this will ripple out into more stable parts of the economy.
„If the US sub-prime mortgage problems get worse, it could begin to hurt US consumers, and that would be very hurtful for exporters,” said Kim Yung-min, a fund manager at SH Asset Management in Seoul. „This month could be very bad,” he added. Wall Street\'s slide on Tuesday also gained momentum from a US Commerce Department report that showed retail sales rose at a lower-than-expected rate of 0.1% in February, suggesting consumer spending could be slowing down. (BBC NEWS)