LONDON, Nov 6: Global stock markets plunged on Thursday on growing fears the world economy faces a deep and long lasting recession as the financial crisis saps growth and dangerously weakens the banking system.

Dealers said investors found no cheer in an unprecedented British interest rate cut and a more modest eurozone reduction, seeing instead only more signs of danger ahead.

Normally, in lower borrowing rates would be a strong buy signal but markets were suspicious about the need for such drastic action, especially in Britain, believing the economy must be seriously at risk.

On Wall Street, which plunged more than 5.0 per cent on Wednesday, stocks opened with modest losses but were soon falling sharply as investors tried to get to grips with the darkening economic outlook after the brief euphoria on Tuesday sparked by Democrat Barack Obama’s presidential election victory.

The Dow Jones Industrial Average was down 2.73 per cent at around 1630 GMT.

In European trade, London’s FTSE 100 index of leading shares lost 5.70 per cent to 4,272.41 points, the CAC 40 in Paris tumbled 6.38 per cent to 3,387.25 per cent and in Frankfurt the DAX shed 6.84 per cent to 4,813.57 points.

Russia’s stock markets plunged more than six per cent following worldwide falls and declining oil prices.

The dollar-denominated RTS fell 6.3 per cent and the ruble-denominated MICEX dropped 9.62 per cent, seemingly unaffected by interest rate reductions in Europe intended to boost the region.

Regulators suspended trading on both exchanges for an hour during the day in response to sharp falls, the latest in a series of such closures amid continued volatility. In other European stock markets on Thursday, losses were also considerable.

Madrid lost 6.27 per cent, Milan was down 5.06 per cent, Switzerland shed 4.08 per cent, Amsterdam fell 6.74 per cent and Brussels was off 3.03 per cent.

The Nordic markets suffered especially, with Oslo tumbling 9.95 per cent, Stockholm down 6.33 per cent, Helsinki off 6.71 per cent and Copenhagen off 6.40 per cent.

Earlier in the day, Asian markets saw losses of up to seven per cent as recent technical gains there turned to dust, confounding hopes that share prices might finally have found a floor.

Tokyo closed down 6.53 per cent, Hong Kong dived 7.1 per cent and Sydney fell 4.3 per cent.—AFP