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World stocks plunge as recession fears bite

07 Nov 2008 2:07 AM

European stock markets have suffered sharp falls in mid-session trading .. when hefty interest rate cuts by both the European Central Bank and the Bank of England failed to dispel deep-seated recession fears.

The Bank of England slashed its key lending rate by a record 1.5 percentagepoints to 3.0 per cent .. while the ECB cut its main lending rate by half a percentage point to 3.25 per cent.

Both banks say they're reacting in the face of an increasingly grim economic climate .. highlighted by the failure of stock markets to rally off the back of BARACK OBAMA'S US election win.

In London .. the FYSE 100 index of leading shares was down 3.17 per cent at4,387.04 .. while in Paris the CAC 40 had shed 3.61 per cent to reach 3,487.60.

The Frankfurt Dax lost 4.37 per cent to reach 4,940.82 points.

Earlier in the day .. Asian markets had losses of around seven per cent.

Tokyo closed down 6.53 per cent yesterday .. Hong Kong dived 7.1 per cent .. and Seoul shed 7.6 per cent .. on concerns about the state of the global economy.

AAP RTV jnbpsm