A global stock market rout gathered steam yesterday as governments scrambled to shield the world from the Greek debt debacle and the United States launched a probe into a calamitous Wall Street plunge.
Virtually no part of the globe was spared yesterday, with jittery investors bailing out of equities for safer instruments in Asia, Europe, Scandinavia, Russia and the United States.
A debt and deficit crisis that has engulfed Greece and is threatening the eurozone has now caught the attention of leaders farther afield.
US President Barack Obama said he and German Chancellor Angela Merkel had agreed on the need for a strong response from the international community.
"I made clear the United States supports these efforts and we'll continue to cooperate with European authorities and the IMF during this critical period," he said.
Finance ministers and central bank governors from the Group of Seven (G7) of the world's top industrialised economies also discussed the increasingly global crisis in a conference call, Dow Jones Newswires reported.
Earlier, Japanese Prime Minister Yukio Hatoyama said he was "very concerned" as stocks in Tokyo plunged 3.10 per cent and Australian Prime Minister Kevin Rudd said he was watching developments in Greece with "considerable concern".
Eurozone finance ministers were meanwhile convening in Brussels to approve a €110-billion EU-IMF loan package for Greece that they hope will boost market confidence in other vulnerable eurozone economies.
While the package received ministerial approval last Sunday, it has failed to shore up investor sentiment, fuelling fears that fallout from the Greek turmoil will infect Spain and Portugal in particular.
In the wake of big losses on Thursday, all major European exchanges closed deep in negative territory yesterday.
The London FTSE 100 index shed 2.62 per cent to close at 5,123.02 while in Paris CAC 40 fell 4.60 per cent to finish at 3,392.59 points. The Frankfurt DAX lost 3.27 per cent to end at 5,715.09, Moscow markets plunged more than five per cent and Nordic exchanges suffered losses of between 2.87 and 4.1 per cent.
On Wall Street Dow Jones Industrial Average sank more than 250 points yesterday morning trading a day after a massive market plunge that spooked investors and dented market confidence worldwide.
By midday the Dow was down 0.45 per cent at 10,485.03 and the Nasdaq composite 1.25 per cent at 2,297.20.
US regulators were probing a stunning Wall Street crash on Thursday that dragged the Dow down almost 1,000 points in mere minutes.
"The regulatory authorities are evaluating this closely with a concern for protecting investors and preventing this from happening again," Mr Obama said.
"They will make findings of their review public along with recommendations for appropriate action.