European markets follow Asia and America into nosedive

— -- European stock markets followed Asia and America into the deep Friday, with recession-worried investors selling off shares across the board on every exchange.

On the London Stock Exchange, the FTSE 100 index of leading companies was down 7.03% at mid-day. In Paris, the CAC 40 was down 7.04%. In Frankfurt, the Dax dropped 8.07%.

Trading on exchanges in Austria, Iceland, Romania, Ukraine was halted when losses mounted quickly. Russian regulators ordered Moscow exchanges, were trading has been suspended for two days, not to open as scheduled.

The pan-European FTSEurofirst 300 index was down 6.8%, putting it on track for its worst week on record.

Sell-offs in Europe followed huge plunges overnight on exchanges in the United States and across Asia. Stock markets plunged from Seoul to Singapore, and then across Europe, after an overnight sell-off in New York. A key Japan index swan-dived 9.6%.

In Europe, although bank stocks were leading the freefall, shares in nearly every sector of the economy were being sold off.

Driving the plunge: Concerns that a global financial crisis that has frozen lending between banks has now seeped across all sectors signaling a worldwide recession.

"We're not talking about fears of recession — recession is here," said Howard Wheeldon, senior strategist at BGC Partners, a London brokerage house. "The question's now how deep, how protracted it's going to be."

The trigger, Wheeldon said, was word Thursday that the credit rating of General Motors could be cut.

That led a massive, 7.4% plunge on Wall Street's Dow Jones industrial average Thursday, with Asian and European investors quickly following suit as markets opened Friday.

"G.M. is a household name everywhere," Wheeldon said. "If G.M. is perceived to be in even worse trouble than it was that's telling the markets this recession is going to be pretty awful."

Gloom from the markets here preceded a meeting by finance ministers and central bankers from the G-7 group of industrialized nations later today in Washington. They gather to try to address the global meltdown in the world's banking systems.