World stock markets fell sharply Monday amid mounting pessimism surrounding this week's G-20 meeting of leaders, more downbeat news from the global banking sector and renewed fears about the fate of the U.S. auto industry.
The FTSE 100 of leading British shares was down 86.27 points, or 2.2 percent, at 3,812.58, while Germany's DAX slumped 150.70 points, or 3.6 percent, to 4,052.85. The CAC-40 in France fell 86 points, or 3 percent, to 2,754.62.
Earlier in Asia, Japan's Nikkei 225 stock average sank 390.89 points, or 4.5 percent, to 8,236.08, and Hong Kong's Hang Seng slid 663.17, or 4.7 percent, to 13,456.33.
The retreat in Europe and Asia followed a sell-off Friday on Wall Street, where investors booked profits on the Dow Jones industrial average's 21 percent gain over 13 trading days. U.S. stock futures pointed to more losses Monday on Wall Street. Dow futures fell 187, or 2.4 percent, to 7,575 while Standard & Poor's 500 futures fell 21.9 points, or 2.7 percent, to 794.20.
The main focus of attention in markets this week is Thursday's meeting in London of G-20 leaders of industrialized and developing countries. While the leaders will look to present a show of unity, especially on the need to regulate global capitalism better, earlier hopes that they will agree a coordinated fiscal boost appear to have been dashed by skepticism in many European governments.
In an interview with the Financial Times newspaper, President Barack Obama conceded that there was a "legitimate concern" that many countries will want to see how their earlier stimulus measures have worked before unveiling further packages.
With new fiscal stimulus plans not expected to feature in the ensuing communique and differences of opinion between the U.S. and Europe persisting, stock markets have started the week on a fragile note.
"Authors of the communique may have to employ a high level of ingenuity if they are to disguise the disparity in view as to the appropriate lengths that countries must go to to secure economic stability," said Neil Mellor, an analyst at Bank of New York Mellon.
"We strongly suspect that disappointment is hanging over the market once more, and it must be said that in view of the price action in equity markets, this augurs badly for the week as a whole," he added.
In addition, investors have been unnerved by reports that the chief executives of JP Morgan Chase & Co. and Bank of America Corp. both said business conditions had become more difficult since they reported being profitable for January and February.
In Europe, sentiment in the banking sector took another hit with the news that Spain was bailing out Caja Castilla-La Mancha — its first bank rescue in 16 years — and reports that UBS is about to cull another 8,000 jobs.
Shares of automakers around the world were also under pressure after the White House said ailing General Motors Corp. and Chrysler LLC. had not submitted acceptable plans to receive billions more in bailout money, increasing the likelihood that the two will eventually file for bankruptcy protection.
Japanese automakers have said the possible collapse of major American automakers would hurt them as well by putting pressure on U.S.-based car parts suppliers. Potential job losses in the U.S. would also weigh on consumer spending.
Toyota Motor Co., the world's largest automaker, fell 3.7 percent, Honda Motor Co. shed 6.7 percent, and Nissan Motor Co. dived 7.7 percent.
In Europe, Germany's BMW AG and Daimler AG both fell over 7 percent.
Adding to the gloom was the news that Japan saw industrial production plunge by 9.4 percent in February as the sharp slump in global demand continued to paralyze the nation's factories. On an annual basis, production was down 38.4 percent.
"That is what you call a collapse in output," said Neil Mackinnon, chief economist at ECU Group, who added that Wednesday's closely watched Tankan survey in Japan will likely be one of the worst in a long time and highlight the weakness in Japanese business confidence.
Elsewhere in Asia, South Korea's benchmark fell 3.2 percent while markets in Singapore, Taiwan, and India fell 3 percent or more.
In oil markets, prices tumbled to below $51 a barrel as investors cashed in on recent gains. Benchmark crude for May delivery fell $1.84 to $50.54 in electronic trading on the New York Mercantile Exchange.
The dollar fell to 96.61 yen from 97.84 yen late Friday, while the euro dropped to $1.3177 from $1.3288.
