Global stocks in Monday mess

Markets tumble in Europe, Asia and Latin America amid shake-ups in Europe's bank sector.

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ATLANTA (CNN) -- Major markets in Europe, Asia and Latin America sank Monday as traders looked past America's bank bailout bill and focused on Europe's growing financial crisis.

The most influential European markets suffered big losses. London's FTSE 100 ended down 7.9%, the CAC 40 in Paris skidded 9%, and the XETRA DAX in Frankfurt tumbled 7.1%.

Russia's RTS index fared worse, shutting down after it fell more than 20%. The index lost 9% of its value in the first 30 minutes of the trading day.

Iceland halted trading in six bank stocks Monday, as Icelandic banks' assets dwarf the rest of its economy and its currency has fallen sharply in the past week.

The global financial meltdown also hit Latin America, where the economies are reliant on commodity exports.

Brazilian stocks plunged 15% to a two-year low before rebounding, and trading was halted twice on Sao Paulo's Ibovespa index. By the end of the day the Ibovespa was down 5.4% to its lowest close since Nov. 28, 2006. Brazil's currency, the real, slumped nearly 7% to a near 2-year low, the biggest one-day percentage loss against the U.S. dollar since 2002.

Mexico's IPC index dropped 5.4%, while the peso dropped 11.8 against the U.S. dollar, a sharp decline from 11.1 on Friday and the lowest since the government lopped three zeros off the currency in 1993.

Argentina's Merval ended the day down 5.9%, Chile's IPSA was down 6%, and Colombia's IGBC fell 4.9%.

Experts say a worldwide economic slowdown could devastate the economies of Latin America, which have until recently reaped the rewards of historically high global demand for commodities. Falling markets could stem that demand.

Earlier Monday, Asian and Pacific markets ended roundly lower. Japan's Nikkei Exchange closed down 465.05 points, or 4.25%, at 10,473.09, a 4-1/2 year low. South Korea's Kospi index finished the day off 4.3%.

The Australian Securities Exchange plunged about 3.4% to 4,544.70, and Hong Kong's Hang Seng lost nearly 5% of its value, falling to 16,803.76.

In the U.S., the Dow Jones industrials plunged by as much as 800 points, falling below 10,000 for the first time since October 2004.

Meanwhile, the euro slid below the $1.35 mark for the first time in over a year.

Bailouts, deposit guarantees sink markets

The slump followed a weekend in which Germany's private financial sector promised to put up an additional 15 billion euros, in addition to the 35 billion euros already pledged, to help shore up Hypo Real Estate bank, the nation's Finance Ministry said Sunday.

The rescue package will help ailing Hypo, one of Germany's largest housing lenders. Earlier in the day, the German government said it would guarantee all private checking and savings accounts in an effort to abate a growing financial crisis in the country, a government official said.

European countries one after another announced deposit guarantees to relieve financial stress on banks and on their markets. Iceland and Denmark issued guarantees Monday after Germany, Ireland, France, Greece and Sweden did the same Sunday.

The guarantees began with Germany, which said it would guarantee all private bank savings and CDs in Europe's largest economy.

"We want to tell people that their savings are safe," said German Chancellor Angela Merkel on Sunday.

Coordinating a response

Yet investors jeered the guarantees, as they raised questions about their potential impact on government finances. Some analysts say the actions showed European governments could not agree on a unified approach to their financial crisis.

But European governments tried to find a coordinated response to the crisis sweeping financial markets.

European Union finance ministers were to meet in Luxembourg on Monday and Tuesday to discuss ways to boost the battered banking system. Italian Prime Minister Silvio Berlusconi is pushing a bailout similar to the one passed by the U.S. Congress last week and signed by President Bush on Friday.

Some analysts have said they expect the Federal Reserve, the European Central Bank and the Bank of England to orchestrate the first joint action on interest rates since the September 2001 terrorist attacks.

-- The Associated Press and CNNMoney.com staff writer David Goldman contributed to this report. To top of page

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