Stock markets around the world at loss for the third day straight
US follows stock market sell-off
World shares have dropped for a third day on concerns about economic growth and the outlook for corporate profits.
A volatile morning in Europe and Asia was compounded by a drop on US markets. The key US Dow Jones index slipped 0.5%. The S&P fell 0.7% and the Nasdaq lost 1.1%.
London's FTSE 100 index lost 2%. It has shed 6% in three days, wiping Â£98bn of its total market value. Germany's Dax dipped 1.8% and France's Cac fell 2.%.
Earlier in the day, Japan's Nikkei 225 index closed 0.9% lower, while Hong Kong's Hang Seng slipped 1.6%
The sell-off was triggered on Tuesday by fears of a new tax in China, but has since spread to wider concerns about the state of the US economy and strength of the mortgage market.
Shares fell 9% in Shanghai on Tuesday, their biggest daily reverse in 10 years, and dropped a further 87.99 points on Thursday, closing 2.9% lower.
On Wednesday, figures from the US Commerce Department showed that the US economy grew at a slower-than-expected pace of 2.2% in the last three months of 2006.
Other figures showed that spending on new home building fell 19.1% during the quarter, the sharpest drop since early 1991, adding to worries over the state of the housing market in the world's largest economy.
"The biggest risk in the next few weeks is likely to come from the US data front and developments in the mortgage and housing markets," said analysts at JP Morgan Chase.
Losses in the US were trimmed slightly thanks to good manufacturing data that helped allay some of investors' fears but it was not enough to turn the market around.
"Right now, everything and anything is viewed in a negative light," said stock analyst Dick Green. "It will take a while for the fears to calm down."