Global markets have lost over $17 trillion in 11 months

Stocks in Europe and Asia fell, sending the MSCI World Index to its worst weekly slump since 2002, on concern earnings at commodity producers will slow while credit losses at banks increase.

Following yesterday's losses, more than $17 trillion (Dh62trn) has been wiped off global stock markets since the peak in October 2007. The MSCI World extended its longest losing streak since February and bringing the weekly slump to 5.6 per cent. The measure is down 20 per cent in 2008 as sub-prime-related losses at global banks topped $500 billion and the global economy cooled.

Financial stocks have led the rout, with a measure for the industry in the MSCI World dropping 29 per cent this year. Banks from UBS to Citigroup had to raise more than $360 billion in capital after contagion from the sub-prime-mortgage crisis in the US eroded earnings.

Europe's Stoxx 600 Index retreated 1 per cent as shares of STMicroelectronics NV and J Sainsbury also fell. The MSCI Asia Pacific Index sank 1.9 per cent.

This week's drop in the MSCI World follows a 1.6 per cent retreat in August that was led by metals producers on concern slowing demand for the raw materials is undermining the earnings capacity of the companies.

Asian stocks fell for a fifth day, set for the biggest weekly decline in a year, as concern over slowing global growth triggered a plunge in finance, energy and raw-materials shares.

Mizuho Financial Group tumbled 6.4 per cent after Bill Gross, manager of the world's largest bond fund, warned of a "financial tsunami'' and Goldman Sachs told investors to sell Merrill Lynch shares.

The MSCI Asia Pacific Index has tumbled 26 per cent in 2008, almost twice the drop in the Standard & Poor's 500 Index, as a global slowdown cuts demand for the region's exports and financial companies post losses and write-downs stemming from the credit crisis.

Japan's Nikkei 225 Stock Average dropped 2.8 per cent to 12,212.23.

Sony Corp fell 4.2 per cent after announcing a worldwide computer recall. Sumco Corp tumbled 11 per cent after second-quarter profit decreased.

Hong Kong's Hang Seng Index fell below 20,000 for the first time since April as Sun Hung Kai Properties Ltd declined 6.1 per cent following a cut in the city's growth forecast by Goldman Sachs. All markets open in Asia declined, with Hong Kong, Indonesia and China posting declines of more than three per cent.

India's benchmark stock index fell the most in two weeks, led by software exporters, as rising jobless claims in the US deepened concerns that growth in the world's biggest economy is stalling. The Bombay Stock Exchange's Sensitive Index, or Sensex, fell 415.27, or 2.8 per cent, to 14,483.83. The S&P CNX Nifty Index on the National Stock Exchange declined 95.45, or 2.2 per cent, to 4,352.30.

Thailand's SET Index fell 9.05, or 1.4 per cent, to 645.80 at the close, the lowest since January 12, 2007; while Malaysia's Kuala Lumpur Composite Index declined 14.52, or 1.3 per cent, to close at 1,070.54.

The measure fell 2.7 per cent this week, its biggest retreat since the five days ended August 8.

Almost six stocks declined for each that rose. Singapore's Straits Times Index dropped 51.84, or two per cent, to 2,574.21, its lowest close since October 4, 2006. The benchmark gauge dropped 6.1 per cent this week, its largest weekly drop since the five days ended August 17, 2007.