KEY POINTS:
Starting with last night's retreat on the Australian share market, a series of falls have marked the global reaction to continued US woes.
Sydney's benchmark S&P/ASX200 index fell 122 points, or 2.32 percent, to 5135.9, while the broader All Ordinaries slipped 118.4 points, or 2.22 percent, to 5215.7.
The Australian drop was attributed to worries over the global credit crunch resurfacing.
Around the world:
US
US stocks tumbled this morning ( NZ time) as the latest signs of global credit stress rattled investors, while a surprise drop in US retail sales fueled concerns about a consumer-led recession.
The decline came two days after a Fed-led move to inject cash into the market sparked stocks' biggest rally in five years. Analysts said the Fed's initiative was not enough to solve the market's problems, and risk aversion again took hold.
UK
Britain's top share index slid 1.5 per cent this morning on fears of more credit market ructions and as the euphoria of this week's central bank cash injection wore off, while record oil prices added to investor gloom.
The FTSE 100 ended down 84.0 points at 5,692.4, but well off its day's low of 5,628.9 after credit rating agency Standard & Poor's said an end to subprime-related writedowns was now in sight for large financial institutions.
Banks led the decline, all falling as investors feared the sector would suffer further fallout due to degradation in credit markets. Barclays shed 2.2 per cent, Royal Bank of Scotland lost 4.6 per cent, HSBC dropped 2.3 per cent and HBOS slipped 2.8 per cent.
EUROPE
European shares fell overnight as financial sector woes weighed on banks such as UniCredit while the high oil price took its toll on airlines and euro strength hurt exporters, notably carmakers.
Leading indexes trimmed steep intraday losses, however, after credit rating agency Standard & Poor's said in a report released late in the European trading day that an end to writedowns was now in sight for big financial institutions.
HONG KONG
Hong Kong stocks fell nearly 5 per cent last night, as weak US and mainland stock markets damped investor confidence, undoing gains from the last session when global equity markets cheered a credit bailout by central banks.