New York, 2008 Jan 22,  Press TV
 
The US Federal Reserve slashes key short-term interest rates by 0.75 percent to 3.50 percent, amid sharp falls in global stock markets. 

Markets tumble on US slump worries

Global markets have been plunging sharply amid concerns over the ability of the Bush administration to prevent a deep looming recession.

On a day of panic selling, hefty overnight falls on Far Eastern stock markets prompted a ripple effect through Europe.

Germany's Dax and France's CAC index both fell by 7 percent and in the biggest one-day fall in London's history £77 billion was wiped off the market value.

Since the start of the year, share prices have dropped by 14 percent. But yesterday's 5.48 percent fall was the biggest in percentage terms since the immediate aftermath of the 9/11 terrorist attacks.

Fears are high that the market rout would continue today when Wall Street opens after being closed for the Martin Luther King public holiday.

The market meltdown also sparked concerns in Asia on Monday morning following a panic in Europe during the day and devastated the Latin America markets by evening.

Asian markets had rampant losses on Monday, with Tokyo down 3.86 percent, Shanghai losing 5.14 percent, Hong Kong dipping 5.49 percent, Seoul down 2.95 percent and Bombay sliding 7.41 percent.

However the Asian stock market plummeted again on Tuesday.

European markets experienced major losses with Paris down 5.48 percent, Frankfurt slid 7.16 percent, Madrid lost 7.54 percent, Milan down 5.17 percent and the Swiss bourse down 5.26 percent.

The meltdown also hit North and South America with Toronto falling 4.75 percent, Sao Paolo down 6.6 percent, Buenos Aires losing 6.27 percent, Mexico down 5.35 percent, Santiago off 5.03 percent and Lima sliding 8.35 percent.

The US President George W. Bush has proposed an economic stimulus package that includes $145 billion in tax cuts, but investors around the world are skeptical that the measures would lift the economy quickly.