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Global Stocks Keep Sliding Amid EU Debt Crisis

World markets tumbled Friday, extending a wave of selling amid growing fears that Europe's debt crisis could spread and undermine global economic growth.

In early trading in Europe, Britain's FTSE 100 fell 0.7 percent, Germany's DAX index dropped 1 percent, and France's CAC-40 lost 0.8 percent. Stock futures pointed to modest gains on Wall Street following the previous day's big sell-off.

Japan's Nikkei 225 stock average retreated 245.77 points, or 2.5 percent, to 9,784.54, while Australia's S&P/ASX 200 index shed 0.3 percent to 4,305.40. Indonesia's benchmark stock index plunged 3 percent, Singapore fell 1.9 percent and India slid 1.4 percent.

China's stock market in Shanghai bucked the trend, rising 1.1 percent.

Hong Kong and South Korean stock exchanges were closed for a public holiday. Trading in Thailand has been suspended due to political turmoil.

Investors fear debt problems in countries like Greece and Portugal will spill over to other countries in Europe. That could then trigger a cascade of losses for big banks and in turn halt economic recovery in the U.S. and elsewhere.

"The danger is that the fear becomes self-fulfilling and disrupts the real economy and derails what's been a stronger than expected global economic recovery," said David Cohen, an economist with Action Economics in Singapore.

"The 2008 crisis in the U.S. showed how damaging it can be when investors become so fearful of counterparty risk, they simply flee to the safety of Treasurys," he said.

Singapore's DBS bank cut its 2010 economic growth forecast for Europe to 0.6 percent from 1.1 percent.

A stronger yen hammered exporters in Japan, with automakers and tech shares posting big declines. Honda Motor Co. lost 3.6 percent, and Nissan Motor Co. fell 3.9 percent. The euro sank to 109.47 yen at one point overnight to hit its lowest level since late 2001.

Japanese Finance Minister Naoto Kan told reporters Friday that he is closely monitoring currency markets and that excessive appreciation of the yen is undesirable, according to Kyodo news agency.

Thursday in New York, the Dow Jones industrial average plummeted 3.6 percent to 10,068.01 in its biggest point drop since February 2009. The S&P 500 fell 3.9 percent to 1,071.59, and the Nasdaq composite index plunged 4.1 percent to 2,204.01.

Oil prices resumed their swoon as concerns over the European economy had traders bailing out of energy commodities. Benchmark crude for July delivery was down $1.10 at $69.69 in electronic trading on the New York Mercantile Exchange.

In currencies, the dollar rose to 89.86 yen from 89.06 yen late Thursday. The dollar had been trading near 92-yen levels earlier this week. The euro rose to $1.2487 from $1.2465.

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