World stocks hit five-and-a-half year lows while oil hit 22-month troughs today on worries over bank giant Citigroup and US car makers.
Citigroup shares tumbled to a 13-year low on Wednesday as investors questioned the survival prospects of the US banking giant.
But the shares rose in pre-market trading today after Saudi Prince Alwaleed said he had boosted his stake in Citigroup back to 5 per cent from less than 4 per cent.
Oil fell by more than $1.50 a barrel to 22-month lows at $51.95, as the slumping global economy hit demand.
The Swiss National Bank cut rates by 100 basis points today to a target range for three-month Swiss franc Libor of 0.5-1.5 per cent, joining central banks elsewhere who have cut rates sharply to boost their economies.
"This move clearly signals that the SNB are concerned about deflationary risks. This joins them with the Fed and BoE who have also expressed similar concerns in recent weeks," said UBS analysts in a client note.
The MSCI world equity index fell to 197.72, its lowest since May 2003 and was trading at 198.52 at earlier today, down 2.04 per cent on the day.
US stock futures were down 0.79 per cent, and the FTSEurofirst 300 index of leading European shares was down 2.5 percent, after earlier hitting a five-and-a-half year low.
US car makers were also weighing on equities, with at least one among household names General Motors, Ford Motor and Chrysler at risk of bankruptcy if a last-minute bail-out plan fails.
However, the dividend yield on the US equity market is now higher than the 10-year US Treasury bond yield for the first time since 1958, Barclays Wealth said in a note.
Federal Reserve officials slashed economic growth forecasts through 2009 on Wednesday, with the lower range of the Fed's central tendencies forecasting the US economy could shrink by 0.2 per cent.
Reuters