Global stocks sink after Wall Street plunge

Traders are pictured at their desks in front of the DAX board at the Frankfurt stock exchange on Oct. 10, 2014. R

REUTERS

BANGKOK - Global stock markets sank Friday after Wall Street suffered its worst day of the year and worries grew that a decline in German growth could push Europe toward another recession.

Britain's FTSE-100 lost 1.3 percent to 6,349.50 while Germany's DAX fell 1.9 percent to 8823.14 and France's CAC-40 declined 1.5 percent to 4,080.83. Wall Street looked set for more declines, with futures for the Dow and S&P 500 down 2.3 percent and 2.4 percent respectively. On Thursday, the Dow lost 2 percent and the S&P fell 2.1 percent.

Tokyo's Nikkei 225 index slumped 1.3 percent to 15,286.25 points and Hong Kong's Hang Seng lost 1.6 percent to 23,144.81. China's Shanghai Composite Index shed 0.6 percent to 2,375.28. Seoul fell 1.3 percent and Sydney and Singapore also declined.

Volatility returned to global markets as U.S. stocks had their worst day of the year just 24 hours after recording their best. Prices fell after members of the Federal Reserve board expressed concern about inflation, tempering suggestions in minutes of a recent Fed meeting released Wednesday that suggested interest rates would not be raised for now. All 30 stocks in the DJ declined.

Concerns that Europe is heading for recession rose after Germany, the continent's biggest economy, reported its biggest monthly drop in exports in five years. The president of the European Central Bank, Mario Draghi, gave no indication of any further monetary stimulus beyond what was announced this summer, suggesting in a speech in Washington that governments need to do more on the fiscal side.

"Markets are rather unimpressed with the state of global growth ... and equally unimpressed with potential policy response," said a note to clients from analysts at Mizuho Bank.

The government called off talks with pro-democracy protesters, possibly extending demonstrations that have blocked streets for almost two weeks. The protesters want a bigger public voice in the selection of the territory's next leader in 2017. The impact on this Asian financial center's economy has been limited but analysts warn it could rise if protests erode its appeal to foreign companies and investors.

Benchmark U.S. crude plunged $2.59 to $84.72 per barrel on concerns slowing global economic growth will reduce demand while production stays high. The contract lost $1.56 on Thursday to $85.77.

The dollar fell to 107.75 yen from Thursday's 107.87 yen. The euro fell to $1.2663 from $1.2700.