13 Dec 2008

Shares slide after bail-out fails

5:57 am on 13 December 2008

World stock markets have fallen following the rejection of a bail-out package for US carmakers by the Senate.

On Wall Street, the Dow Jones index shed 1.4% in early trading, while the FTSE 100 fell 2.7% and the Cac-40 lost 3%.

The BBC reports the lack of Senate support for the $US14 billion deal for has raised fears of job cuts and a possible collapse of the industry in the United States.

The White House says it is considering using money earmarked to rescue US banks to bail out the industry.

In Asian trade: the Nikkei share index in Japan fell 484.68 points, or 5.6%, to 8253.87, while the Hang Seng index in Hong Kong sank 6.9%. Other regional markets also fell.

Following the market falls, the Japanese government announced a 23 trillion yen ($US254.6 billion) stimulus package.

It is designed to boost employment, encourage lending and inject capital into financial markets.

The BBC reports 10 trillion yen will go on tax breaks and public financing while 13 trillion yen will be used to prop up financial markets.