MercoPress. South Atlantic News Agency

Global markets fail to recover on fears of corporate earnings

World shares dropped for a third day Thursday on concerns about growth in leading economies and the outlook for corporate profits. A large slide in Europe and Asia was compounded by a drop on US indexes.

The global sell-off was triggered Tuesday by fears of new taxes in Chinese markets and forecasts of a possible recession in the United States, and has since spread to wider issues. Shares fell 9% in Shanghai on Tuesday, their biggest daily reverse in 10 years, and dropped a further 2.9% on Thursday. In Europe Germany's Dax and France's Cac both fell 1.1%. Earlier in the day, Japan's Nikkei 225 index had closed 0.9% lower, while Hong Kong's Hang Seng slipped 1.6% Sydney closed 0.31% lower and Singapore down 0.37%. London's FTSE 100 index closed 0.9% lower. It has shed 5% in three days, wiping more than £80bn of its value. 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. At the same time, investors are questioning whether stock prices have climbed too high, too quickly. A number of the world's main indexes have broken records recently, and analysts said that corporate earnings may not be good enough to underpin the gains. In Wall Street the Dow Jones closed 0.3% lower, the Nasdaq 0.5% and S & P, 0.26%. In Latinamerica following on Wall Street, Sao Paulo's Bovespa dropped 0.76%; Argentina's Merval 1.4%; Mexico was almost flat down 0.03% and Chile's IPSA recovered 0.81%.