Global stocks extend freefall

LONDON – Global stocks tumbled further and safe bet gold surged to new records Friday on mounting fears of fresh recession amid slowing growth in top economies and debt tensions in the eurozone and United States.

The euro fell against the dollar, while the US currency dropped versus the yen, whose strength continued to hurt Japanese exporters.

“Weak data continues to make the hairs on the back of investors necks stand up and with volatility remaining high across global equity markets, the reaction in the markets to this sensitivity remains quick and severe,” said Joshua Raymond, chief market strategist at City Index traders in London.

European stock markets slumped in early deals with the banking sector again routed after Asian and US indices closed with huge losses.

In morning trade, London was down 1.95 percent after earlier losing more than three percent, Frankfurt shed 3.21 percent, Paris lost 2.81 percent, Madrid tumbled 2.71 percent and Milan gave up 2.13 percent.

In Asia, Tokyo tumbled 2.51 percent, hit by the double-whammy of global fears and the persistently strong yen, while Sydney shed 3.51 percent and Seoul plunged 6.22 percent.

“Further weak manufacturing data from the US and surprisingly poor German GDP this week increase the likelihood of a double-dip recession and recent evidence indicates there are also inflationary pressures in these weakening economies,” said Spreadex trader Jordan Lambert.

 “This is a double blow to consumers as they now have price rises to deal with along with job insecurity which all leads to less disposable income. Despite the gloomy economic picture M&A activity continues.”

Hewlett-Packard, the world’s top personal computer maker, announced Thursday that it was buying British enterprise software company Autonomy for $10.24 billion (7.17 billion euros).

HP said it would purchase all of the outstanding shares of Autonomy for $42.11 a share in cash, a premium of 64 percent over Autonomy’s closing price on the London Stock Exchange on Wednesday. Autonomy’s share price jumped 75 percent on Friday.

With trillions of dollars wiped off global stock markets in recent weeks, cash-rich companies are seizing bargains. Google shook up the mobile phone industry Monday with the announcement it was buying US smartphone maker Motorola Mobility for $12.5 billion.

London-based brewer SABMiller meanwhile launched a hostile bid for Australian beer giant Foster’s on Wednesday worth $10 billion.

Elsewhere, gold continued to benefit from the stock market turmoil, with the precious metal striking a record high of $1,867.95 an ounce on the London Bullion Market.

“Flights to safe haven asset plays such as gold, which remains the defensive trade of choice, has continued,” said analyst Raymond.