World stocks plummet as auto sector reels
Mon Mar 30, 5:26 am ET
LONDON (AFP) – European and Asian stock markets dived on Monday as fresh woes for the global auto sector and extremely weak economic data triggered a rush to dump shares, traders said.
Tokyo closed down 4.53 percent as bad industrial and auto production data fed the gloomy economic outlook and traders rushed to lock in profits made last week, they added.
US automaker General Motors must undergo a "substantially more aggressive restructuring" if it is to have a long-term future, the White House said Monday in a tough review.
Publication of the report followed news that GM chief executive Rick Wagoner has resigned.
On Sunday, Peugeot said it had removed its chief executive Christian Streiff as France's biggest carmaker struggles with the effects of the international economic crisis.
On Sunday, Peugeot said it had removed its 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 G20 summit on the financial crisis and the ECB's latest rate decision, both due Thursday, while Friday sees the release of key US jobs data.
In early European trade Monday, London dropped 2.30 percent, Frankfurt dived 3.49 percent, Paris slumped 2.89 percent, Madrid shed 3.26 percent and Zurich declined 2.47 percent.
"As the week progresses, the hope that we'll see headway from the G20, rather than simply rhetoric, could offer some support," said CMC Markets dealer Matt Buckland.
US President Barack Obama has rejected suggestions of a split with Europe on how to tackle the global financial crisis when leaders of the Group of 20 rich and emerging economies meet in London.
"The most important task for all of us is to deliver a strong message of unity in the face of crisis," he told the Financial Times newspaper.
Ahead of the summit, stocks tumbled across Asia on Monday. Hong Kong share prices closed 4.70 percent lower, Seoul slumped 3.24 percent, Taipei dived 3.43 percent and Sydney gave up 1.85 percent.
"Today's fall was widely expected," Taiwan International Securities analyst Arch Shih said of Taipei's slide. "The market had scored substantial gains recently. It was time for a correction."
US shares had swung lower Friday on profit taking after a series of strong gains, as investors reassessed the outlook for recovery from the recession gripping the world's largest economy.
The Dow Jones Industrial Average slipped 1.87 percent. The Nasdaq composite fell 2.63 percent and the broad-market Standard & Poor's 500 index shed 2.03 percent.
Ahead of Wall Street's reopening Monday, a task force set up by President Barack Obama found GM's plan to shake-up its ailing business and qualify for more government loans "is not viable and will need to be restructured substantially."
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"A house is not built overnight. And to clear the debris, you need some time too."
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