NEW YORK, Sept 24: Stocks continued to plumb depths not seen in years on Tuesday on concern that surging oil prices would deal a fresh blow to the ailing world economy and sagging corporate profits, although respectable US data helped offer some support.

Across the 12-nation euro zone, the Euro Stoxx 50 index fell 1.6 percent to 2,181.4 points, just off an earlier five-and-a-half-year low.

The latest decline left the index down a whopping 43 per cent since the start of the year, and around 60 per cent below its March 2000 all-time high. The fall came after Wall Street suffered further losses, a day after a sharp sell-off propelled the Nasdaq Composite index to its lowest level in six years.

British blue chips swooned to near seven-year lows on Tuesday, bloodied by a rout in bank and telecoms stocks which wiped 16 billion pounds off the FTSE and which fund managers warned could still have further to run.

The UK’s benchmark index closed down 68.3 points or 1.8 per cent at 3,671 points, setting a new closing low at levels last seen in December 1995, but helped off a bone-jarring intraday low of 3,609.9 by better-than-expected US consumer confidence data which limited Wall Street’s decline.

In early deals Tuesday, the Dow Jones Industrial Average was down 1.4 per cent, while the technology-laden Nasdaq was flat.

Worries over the economic downturn and a possible war in Iraq continued to support bonds, as investors sought a safer sanctuary for their funds. US government bond yields edged up slightly on Tuesday, a day after the rout in stocks helped push Treasury yields to their lowest level since 1958.

Among leading European stock markets, the Paris CAC 40 index fell 1.8 per cent to 2,742.8 points, while the German DAX 30 index fell 3.1 per cent to 2,823.2 points.

“Fears over the slowdown in the economy and its impact on earnings are driving stocks lower,” said Scott.

“And of course, you’ve got concern about the political situation and the impact of higher oil prices which in effect acts as an extra tax on both the consumer and corporates,” he told AFP.

Asian stocks were in sick shape earlier Tuesday with shares sliding 1.7 per cent in Tokyo while Hong Kong stocks fell 1.3 per cent.—AFP/Reuters