US and most European stock markets closed lower yesterday as investors confronted mixed corporate results and fretted about fresh warnings of recession.

On Wall Street, the Dow Jones plunged two point five per cent to close at just over 9000. The tech-heavy Nasdaq slumped a hefty 4.14 per cent.

Most European exchanges ended the day with losses although the CAC 40 in Paris managed to gain just under one per cent.

Market sentiment swung from optimism on Monday to rising fears that the world is heading for prolonged downturn.

But there was one glimmer of hope – the interbank lending rate continued to fall – suggesting rising confidence in the sector.

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