Hong Kong’s exchange was down 3.4 per cent. Shanghai, which reopened today after a week break, dropped 3.5 per cent despite regulators’ attempts to support the market. Japan's Nikkei stock average plunged 5 per cent by mid-morning. Markets in South Korea, Singapore and Thailand also fell sharply. Indonesia's key index plunged more than 5 percent.
Germany's announcement Sunday of a rescue package for Hypo Real Estate, the country's second-biggest commercial property lender, is good news but also a sign that Europe too is having to prop up the financial sector.
Similar problems are affecting banks in the United Kingdom, Belgium and France.
European leaders pledged action to avoid financial chaos, but fears remain that consumption in the United States and Europe will drop, causing a slowdown in the world economy.
According to some analysts the US rescue plan is coming too late since the country’s economy is already in a recession.
Last month alone the US lost 150,000 jobs.