World Markets Dodge Another Day of Sharp Losses

World stocks took another beating Monday, although some markets showed resilience by bouncing off session lows, as global economic gloom darkened investors' outlook.

People look at stock prices in downtown Tokyo Monday, Oct. 27, 2008. Japan's stock market had a...

People look at stock prices in downtown Tokyo Monday, Oct. 27, 2008. Japan's stock market had a miserable and manic Monday, with the key stock index plunging more than 6 percent to its lowest close in more than a quarter century. The Nikkei 225 index shed 486.18 points, or 6.36 percent, to 7,162.90 _ the worst closing level since October 1982.

(Katsumi Kasahara/AP Photo)

Asian markets started the week with a thud, with stocks in Hong Kong falling nearly 13 percent and Japan's Nikkei index closing at its lowest level in over a quarter century.

In Europe, markets ended off their lows as some bargain hunters were cheered by a mild rally on Wall Street that faded at the close. Latin American shares, meanwhile, fell further on concerns the region's export-oriented economies will suffer as world demand slacks.

Investors are wary of wading back into equities, worried a stream of economic data from the U.S. this week could bring more bearish news about the world's largest economy and trigger another round of selling, analysts said. Selling by investment managers, bracing for another wave of redemptions, also fed the declines, they said.

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"Investors aren't totally convinced the worst is over yet," said Alex Tang, head of research at Core Pacific-Yamaichi in Hong Kong.

The day's most dramatic action came in Asia, where the Nikkei index in Japan closed down 6.4 percent to 7,162.90 — the lowest since October 1982 — as the financial crisis raised recession fears and drove up the yen, piling the pressure on the country's exporters.

Hong Kong's Hang Seng Index tumbled 12.7 percent to 11,016, its lowest close in more than four years and biggest daily decline since 1991. China's benchmark, the Shanghai Composite Index, lost 6.3 percent, or 116 points, to 1,723. It is now down about 72 percent from its peak about a year ago.

Only South Korea's market managed to eke out gains, perhaps in part because of a big interest rate cut there. The benchmark Kospi ended 0.8 percent higher at 946.45.

The sharp declines across most of Asia came amid another round of government measures to boost their markets. In South Korea, the central bank slashed its key interest rate Monday by three-quarters of a percentage point — its biggest cut ever — to prevent Asia's fourth-largest economy from lurching into recession.