World shares fall on credit fears

World shares fall on credit fears

Analysts say markets will remain volatile in the near future

Markets have faltered in Friday trading, a day after markets in the US and Europe suffered heavy losses amid fears of a global credit crunch.

In morning trade the London FTSE 100 was 2.42% lower, the French Cac was down 2.20%, and German Dax down 1.61%.

The European Central Bank injected cash into the money market for a second day, a move echoed by other central banks across the world.

The ECB move was to "assure orderly conditions in the euro money markets".

The bank injected 61.05 bn euros (£41.65bn; $84.2bn) into the eurozone money markets on Friday.

Japan's central bank had earlier pumped one trillion yen ($8.5bn; £4.2bn) into the financial system to boost liquidity.

At close of trade in Japan, the Nikkei share index was down 2.4%, at 16,764.1.

The jitters come a day after the FTSE closed down nearly 2%, and following an overnight decline of close to 3% on the Dow Jones index in New York.

Many more financial institutions may come out in the future to say they have been making losses on the back of the sub-prime problems

Global markets have been rattled by worries over financial institutions' exposure to bad credit in the US sub-prime mortgage market.

In Hong Kong the Hang Seng index ended the day down 2.88% at 21,799.96, after trade was suspended early because of a tropical cyclone warning.

South Korea's central bank said it would also intervene if necessary in financial markets to counter the international turmoil.

Central banks in several countries have been intervening in the money markets to prevent a continuing problem with US housing loans turning into a global financial crisis.