NEW YORK (CNNfn) - Latin American stock markets proved especially susceptible to further signs of Russian economic decay on Thursday, plummeting as investors fled emerging markets worldwide, while in Canada stocks also ended sharply lower on local currency worries.
Toronto equities plunged to 16-month lows, hit hard when the Bank of Canada boosted interest rates by 100 basis points in an apparently futile attempt to rescue the country's falling currency.
Gloom on global markets and ailing commodity prices only added to Toronto's woes.
The TSE 300 Composite index ended off 372.45 points, 6.03 percent, at 5,799.85. Volume was comparatively heavy, at 146 million shares.
All 14 subindexes were substantially lower, with serious falls of 6.17 percent in gold, 6.18 percent in metals and minerals, and 6.88 percent for oil.
Interest rate rises hurt stock prices because of the risk of damage to consumer confidence. Higher rates also draw investors out of high-yield blue chip stocks and into bonds.
The central bank's rate rise, while damaging to equities, had little impact on the dollar, which resumed its fall after a brief hiatus, hitting a further historic low of C$1.5845 (US$0.6311).
The gloom gathering over global equity markets and foundering base and precious metals prices added to the downside.
Gold slid sharply to fix at US$278.50 in afternoon London action, matching the low of January 12, which was itself the lowest level since June 29, 1979.
"Everybody's operating in a vacuum. Suddenly everybody wants to get out the same door," said Irwin Michael, portfolio manager at ABC Funds.
Brazilian stocks went into a virtual free-fall as Russia's economic problems continued to haunt investors.
The Bovespa index ended down 9.95 percent, 731 points, falling to 6,617, a 21-month low.
"We fell to a limit today," said a Corretora Sao Paulo trader. "But it can get uglier, because we're engaged in a vicious cycle."
Mexican stocks tumbled to their lowest closing level in two years, succumbing, as did the spiraling Dow to Russia's deepening financial crisis, dealers said.
The IPC index of leading stocks ended off 6.11 percent, 198.73 points, at 3,055.71, its weakest close since August 1996.
Venezuelan share prices plummeted to a 29-month low, shaken by a lethal mix of domestic economic woes and global market uncertainty sparked by Russia's financial and political turmoil, traders said.
The 15-stock IBC index dropped 9.92 percent, 320.01 points, to 2,905.90 -- a level not seen since the first week of March 1996.
"If it wasn't for Russia, the bolsa would still be falling, although not quite so much," Cavelba broker Rafael Alcantara said. Turnover was a moderate 40 million shares worth 1.1 billion bolivars ($1.9 million).
Investors fear Venezuela will be forced to devalue its currency to cover a widening fiscal deficit caused by the stubborn slump in world oil prices. But Planning Minister Teodoro Petkoff reiterated that the government had no plans to devalue.
"How on earth can a country which has a balanced current account and more than $15 billion in foreign reserves be thinking about a devaluation?" he said in a radio interview.
Separately, Venezuela reported a slimmer current account surplus for the first half of 1998. 
-- from staff and wire reports
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