Global shares dive on US car deal collapse

Shares in London plummeted by nearly 180 points today, following the failure of US carmakers to secure a $14 billion rescue fund from the Government, raising the prospect that Chrysler and General Motors could file for bankruptcy within days.

The FTSE 100 index of leading shares tumbled 179 points to 4,209.49 as details of the US Senate’s refusal to back the bailout deal emerged. London shares followed Asia markets lower, with Japan’s Nikkei 225 Index, briefly falling over 7 per cent on massive selling of Toyota, Honda, Nissan and the other domestic automakers.

The Hang Seng plummeted nearly 7 per cent while the China Enterprises Index of mainland stocks dived 8 per cent. Asia investors are fearful that the market will become flooded with cheap US cars if America’s “Big Three” go bust after the Senate effectively threw out a $14 billion emergency bailout bill.

Pain was felt across Europe where stocks tanked, with Germany’s Dax down 3.9 per cent dragged lower by local carmakers, BMW, Daimler and Porsche. While in France, the CAC index fell 4.3 per cent on Renault and Peugeot’s tumbling shares.

From the Times (UK)

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