LONDON - WORLD stocks fell further on Thursday, with the heaviest falls in Asia, as investors worried about the worsening global economy despite international efforts to ease the financial crisis.

'So long as there's this rather blunt - and perhaps rather realistic - fear of a global recession looming, then there's certainly scope that stocks will continue to struggle,' said CMC Markets dealer Matt Buckland in London.

Markets ignored signs that the credit crunch may be easing and focused instead on the risk of a global recession, which could slash company profits, lead to rising layoffs and cut consumer spending.

Japan's Nikkei tumbled more than seven per cent at one point, hitting levels last seen in May 2003. Tokyo ended down 2.46 per cent amid hopes that Wall Street will bounce higher when it reopens at 1330 GMT (9.30pm Singapore time).

Hong Kong share prices dived 3.6 per cent, following concerns over a negative corporate outlook, dealers said.

European markets swung lower in morning trading. London lost 0.86 per cent, Paris slid 1.10 per cent and Frankfurt was down 1.74 per cent.

Sydney finished 4.4 per cent lower while Hong Kong lost 4.6 per cent by midday. Worst hit was Seoul, which ended down 7.4 per cent, while Chinese share prices declined by 1.07 per cent.

'Escalating concern about a global recession has prompted investors to bail out of growth-sensitive assets,' said NAB Capital analyst Robert Henderson.

While the outlook for the major economies is hardly rosy, 'the picture is even uglier for emerging economies', he warned.

Stocks had dived more than 10 per cent on the Argentine and Brazilian markets on Wednesday.

The White House announced it would host a summit of the leaders of the Group of 20 rich and emerging nations on November 15 to try to coordinate efforts to counter the worst financial crisis since the Great Depression in the 1930s.

In Japan, Prime Minister Taro Aso urged investors not to overreact to the fresh drop.

'When it comes to stocks, you shouldn't be upbeat one day and fret the next,' he said. 'What's important is that companies whose stocks you own perform well on an operating level'.

But with the business climate rapidly worsening, electronics giant Sony issued a profit warning after the market close, saying net profits would more than halve this year due to a stronger yen and global economic slowdown.

US stocks plummeted on Wednesday on global recession worries, grim corporate outlooks and falling oil prices.

The Dow Jones Industrial Average lost 5.69 per cent while the broad-market Standard and Poor's 500 slid 6.10 per cent to a five-year low.

European markets had also fallen heavily on Wednesday as a blunt recession warning from British Prime Minister Gordon Brown cast a shadow over trading.

Elsewhere on Thursday, New Zealand shares lost 3.18 per cent as a record one percentage point reduction in interest rates by the central bank failed to cheer investors.

Indian shares slid 4.8 per cent in morning trade, slipping back below the key 10,000 points level.

In Japan, data showed the country's trade surplus plunged 94 per cent in September from a year earlier, adding to fears that its export-led recovery from recession in the 1990s has ground to a halt.

The euro fell to multi-year lows as traders braced for interest rate cuts by the European Central Bank to try to spur economic growth.

The European single currency dropped briefly to 1.2728 US dollars, the lowest since November 2006. It slid to 123.43 yen, levels last seen in December 2002.

HONG KONG
Hong Kong share prices closed 3.6 per cent down on Thursday, following concerns over a negative corporate outlook as the global financial crisis deepens, dealers said.

The benchmark Hang Seng Index fell 506.11 points to 13,760.49. Turnover was 56.46 billion Hong Kong dollars (US$10.9 billion).

Trading group Li & Fung plunged 12.27 per cent as demands from the US and other crisis-hit economies continued to fall.

Citic Pacific rose 1.83 per cent after news of potentially huge foreign exchange-related losses dragged share prices down 66 per cent from Monday to Wednesday.

KUALA LUMPUR
Share prices on Bursa Malaysia ended the day broadly lower today as sentiment weakened regionally amid worries of a global financial downturn, said dealers.

They said selling was moderate and investors were reluctant to hold fresh positions ahead of the long weekend with the Deepavali celebration on Monday.

The benchmark Kuala Lumpur Composite Index (KLCI) slipped 12.96 points to end the session at 891.32, the lowest point since mid 2006, after opening 12.47 points lower at 891.81 this morning.

Throughout the session, the KLCI moved between 880.81 and 893.97.

Foreign investors were the net sellers in most Asian markets.

'They are holding back their portfolio investments at the moment, waiting to see the finances of their respective countries in order first', said a dealer.

The Industrial Index fell 30.23 points to 2,108.97, the Finance Index shed 130.48 points to 6,851.72 and the Plantation Index eased 111.41 points to 3,688.62.

The FBMEmas slipped 72.81 points to 5,882.39, the FBM30 lost 55.28 points to 5,812.98, the FBM2BRD decreased 78.58 points to 4,365.15 while the FBMMesdaq Index was 91.59 points lower at 3,342.37.

Losers outnumbered gainers by 477 to 161 while 188 counters were unchanged, 506 untraded and 26 others suspended.

Volume rose to 579.384 million shares worth RM1.043 billion (S$438 million) from yesterday's 510.391 million shares worth RM1.067 billion.

SEOUL
South Korean shares fell 7.48 per cent to a three-year low on Thursday as investors grew increasingly fearful of a global recession following the overnight tumble in US markets.

The local currency hit a 10-year low against the dollar to close at 1,408.8 won to the US unit, down 45.8 won from Wednesday's finish.

The KOSPI stock index ended down 84.88 points at 1,049.71, its lowest since July 12, 2005.

Volume was 394 million shares worth 5.28 trillion won (S$5.6 billion), with losers outpacing gainers 807 to 58.

SHANGHAI
Chinese share prices closed down 1.07 per cent on Thursday led lower by bank shares as part of global selloffs amid mounting recession fears, dealers said.

Sentiment took another hefty blow after two Chinese railway companies announced foreign exchange losses of more than US$300 million (S$451 million), becoming the latest Chinese firms to fall victim to bad currency bets, traders said.

The benchmark Shanghai Composite Index, which covers A and B shares, was down 20.26 points at 1,875.56 on turnover of 33.0 billion yuan (S$7.2 billion).

The Shanghai A-share index fell 21.32 points, or 1.07 per cent, to 1,970.06 on turnover of 32.9 billion yuan, but the Shenzhen A-share index added 4.18 points, or 0.78 per cent, to 540.71 on turnover of 13.3 billion yuan.

TOKYO
Japan's Nikkei stock index closed down 2.46 per cent on Thursday as worries grew about the worsening global economy, but it finished well off its lows of the day on hopes of a Wall Street rebound.

Market sentiment was hit by a strengthening of the yen, which hurts Japanese exporters by making their goods less competitive overseas.

The Nikkei closed down 213.71 points to 8,460.98. The index had slumped more than seven per cent in early trade.

The broader Topix index of all-first section shares was down 17.53 points or 1.97 per cent at 871.70. -- AP, AFP, BERNAMA, THOMSON REUTERS