LONDON - GLOBAL shares fell again on Tuesday, battered by growing prospects of a deep global recession and one of the biggest job cut plans in history at Citigroup.

Despite relatively stable conditions in short-term credit markets, banks were struggling to contain climbing losses on bad loans, with Citi, the second-largest US bank, reducing its workforce by 15 per cent in a dramatic move to restore itself to health.

HSBC also laid off an additional 500 staff in Asia after announcing 1,100 job cuts in September.

The state of the global economy remained the main concern.

'Analysts are no longer wondering if we are in a recession'.

'The question now is how long and how painful will this economic contraction be', said Mr David Evans, analyst at BetOnMarkets.com.

The pan-European FTSEurofirst stock index was down 1 per cent, giving up early minor gains. Global stocks as measured by MSCI were also down 1 per cent percent for an 11 per cent loss this month and a nearly 48 per cent decline in the year-to-date.

MSCI's benchmark emerging market stock index was down 3 per cent, reflecting concern about the impact on traditionally volatile sectors from the global downturn.

Japan's Nikkei average slipped 2.3 per cent, eith exporters such as Sony Corp battered.

'There's no question that the economies of both the United States and Japan are doing poorly and will do worse, so the downside risk is quite high', said Mr Toshihiko Murai, general manager of equities at Nozomi Securities.

The benchmark Nikkei shed 194.17 points to 8,328.41. The broader Topix lost 1.8 per cent to 835.44.

US dollar stronger
The US dollar rose against the euro and yen as the stream of bad economic news prompted more unwinding of risky currency positioning in favour of the US currency.

'The big issue is whether we are going to see a continuation of dollar repatriation', said Mr James Shugg, economist at Westpac in London. 'There's likely (to be) nothing to stop this from happening in the short term.'

The euro was down about a third of a per cent to US$1.2605. The US dollar gained about a quarter of a per cent against the yen to 96.59 yen.

Euro zone government bond futures edged higher.

The Bund future was 8 ticks up at 118.82, compared with 118.74 at Monday's settlement close.

Two-year paper yielded 2.167 per cent, 2 basis points less than in late Monday trade while 10-year Bond yields were flat at 3.647 per cent.

KUALA LUMPUR
Malaysian share prices closed 0.1 per cent lower on Tuesday in lacklustre trade on a lack of fresh leads and weak sentiment after Wall Street's overnight fall, dealers said.

The Kuala Lumpur Composite Index shed 0.97 of a point to close at 883.09.

SHANGHAI
Chinese share prices dropped 6.31 per cent on Tuesday due to heavy selling on profit-taking as concerns over China's economic growth and corporate earnings continue to weigh on the market, dealers said.

The benchmark Shanghai Composite Index, which covers A and B shares, fell 128.06 points to 1,902.43 on turnover of 101.5 billion yuan (S$22.58 billion).

The Shanghai A-share index lost 134.42 points, or 6.30 per cent, to 1,998.49 on turnover of 101.1 billion yuan, while the Shenzhen A-share index shed 40.67 points, or 6.86 per cent, to 552.47 on turnover of 43.4 billion yuan.

HONG KONG
Hong Kong share prices closed 4.5 per cent lower on Tuesday, with sentiment hit by a fall on Wall Street and fears of job cuts amid a global economic recession, dealers said.

The benchmark Hang Seng Index closed down 613.64 points at 12,915.89.

TOKYO
Japan's Nikkei stock index closed 2.28 per cent lower on Tuesday after another raft of gloomy economic and corporate news added to fears of a deep global recession.

The benchmark lost 194.17 points to 8,328.41, after the Dow Jones Industrial Average lost 2.63 per cent overnight on Wall Street as US banking giant Citigroup announced 50,000 job cuts. -- AFP, THOMSON REUTERS, BERNAMA