Bears take a bigger bite out of shares

Hopes that dealers might hold their nerve at the open today appeared to be shot down following overnight stockmarket falls in Asia of up to 9%, and the Footsie immediately dived by more than 4%.

However, as the market played out ahead of the all-important Wall Street opening later today, the worst of the losses were being pegged back.

Following yesterday's 323.5-point retreat - a collapse of 5.5% and the worst since the 9/11 terrorist attacks on the US - the FTSE 100 was today off 26.5 points at 5551.7.

Hargreaves Lansdown fund manager Ben Yearsley said: "There is no point in panicking. Valuations in the UK now don't look expensive. After the latest falls around the world, recession is now probably priced into most markets."

F&C Investments' top stock-picker Paul Niven said: "The sharp sell-off in the past couple of days provides a confirmation signal to a growing community of bears. The recent weakness has undoubtedly been both extreme and abnormal."

European exchanges opened amid signs of chaos while Asian turmoil was punctuated by finance ministers across the continent attempting to calm investors, saying that the credit crisis is a Western problem.

Paris - the CAC 40 fell 6.8% yesterday and despite failing to open properly today as traders desperately tried to sell, it recovered its poise to be just 1% down.

Frankfurt - the Dax had led Europe down yesterday, giving up 7.2%, and was off another 2% today.

Sao Paolo - Brazil's Bovespa, Latin America's largest index, bore the brunt of Wall Street's holiday yesterday, taking a 6.6% hit.

Shanghai - the Shanghai Composite tumbled more than 7%. Weighing heaviest were reports that the Bank of China may be about to announce multibillion-dollar losses in US mortgage lending.

Bombay - trading on the Sensex was suspended amid falls of 11%, and then even at the close the authorities could only guess at what level the index was trading. The sell-off came despite calls for calm from India's Finance Minister P Chidambaram. "There is no reason at all to allow the worries of the Western world to overwhelm us," he told investors.

Tokyo - amid indications from the Bank of Japan that it is tearing up its growth forecasts as over-optimistic, the benchmark Nikkei 225 Stock Average dropped by a further 5.7%, extending its losses since the turn of the year to 18%.

Sydney - the ASX 200 index posted its 12th consecutive day of falls, crashing by another 7% and taking the main Australian stock index to a 15-month low.

Hong Kong - attempts by traders to rein in the worst of the session's losses failed and the Hang Seng index ended the day with a loss of more than 2000 points or 8.7%.

Kuala Lumpur - Malaysia's Composite index was holding its nerve, and managed to keep the damage pegged back to a decline of 4%. Finance Minister Nor Mohamed Yakcop urged traders to keep their heads. "We have abundant liquidity in the system. There is no problem. Shares are up and down but it is not like the subprime crisis," he said.