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World stocks plummet as auto sector reels
2009-03-30
LONDON (AFP) - Global stock markets dived on Monday as fresh woes for the global auto sector and extremely weak economic data triggered a rush to dump shares and cash in on a recent rally, traders said. After the White House unveiled plans for an auto industry shake-up and kicked out General Motors chief executive Rick Wagoner, the Dow Jones index plunged 3.71 percent and the Nasdaq fell 3.37 percent in afternoon trading. In Europe, London closed down 3.49 percent, Paris dropped 4.27 percent and Frankfurt plunged 5.10 percent. Leading the fall on several markets were car companies also hit by a global slump in demand, like their US counterparts. Tokyo fell 4.53 percent as bad industrial and auto production data fed the gloomy economic outlook and traders rushed to lock in profits from last week. Referring to the drop on the London stock exchange, David Evans, a market analyst at online betting company Betonmarkets.com, said: "Most of last week's dominant trends have slipped into reverse gear." Tim Hughes, head of sales trading at financial spread better IG Index, said the problems of US auto giants General Motors and Chrysler were "once again focussing investors' minds on just how bad things have got for the economy." US President Barack Obama said General Motors and Chrysler should consider bankruptcy proceedings as a way out of the crisis after a White House task force report said their recovery plans to get more state aid were "not viable." On Sunday, the supervisory board of PSA Peugeot Citroen said it had removed chief executive Christian Streiff as France's biggest carmaker struggles with the effects of the international economic crisis. "One thing is for sure ... no-one should expect quick fixes to the current economic malaise," said analyst Dermot O'Leary at Goodbody Stockbrokers. Ahead for investors this week are the Group of 20 summit of world leaders on the financial crisis and the European Central Bank's latest interest rate decision, both due Thursday, while Friday sees the release of key US jobs data. "As the week progresses, the hope that we'll see headway from the G20, rather than simply rhetoric, could offer some support," said Matt Buckland, a dealer at London-based online trading company CMC Markets. President Obama has rejected suggestions of a split with the European Union on how to tackle the global financial crisis when leaders of the Group of 20 developed and emerging economies meet in London. Elsewhere in Europe on Monday, Swiss shares closed down 2.60 percent, the Netherlands lost 4.79 percent, Italy's Mib index dived 6.09 percent and Spain's Ibex-35 lost 4.12 percent. Earlier in Asia, Hong Kong share prices closed 4.70 percent lower, Seoul slumped 3.24 percent, Taipei dived 3.43 percent and Sydney fell 1.85 percent. "Today's fall was widely expected," Taiwan International Securities analyst Arch Shih said of the 3.43-percent slide on Taipei's stock exchange. "The market had scored substantial gains recently. It was time for a correction."
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