Global Markets Fall Despite Reassurances

BERLIN, Oct. 10 -- Fear seized investors around the world Friday as stock markets dropped to levels not broached for several years. National leaders tried to intervene with reassurances and stopgap measures, to no avail.

In Japan, the Nikkei 225 index fell by 9.6 percent, its worst single-day decline in two decades, ending an abysmal week in which the index lost nearly one-quarter of its value. A century-old Japanese insurance company filed for bankruptcy protection.

Stocks plunged elsewhere in Asia, as well as in Europe and South America. Middle East markets were closed.

Iceland, Russia, Austria and Indonesia suspended trading or stopped it for the entire day to slow the declines.

"It is as if the bottom has fallen out of a bucket," Kazuyoshi Kaneko, Japan's transportation minister, told reporters.

Panicked traders ignored a long list of financial rescue plans, interest-rate cuts and bank deposit guarantees announced by governments and central banks in recent days. With the spiral deepening, investors were hoping a firebreak might emerge this weekend in Washington from an emergency meeting of financial ministers and central bankers from the United States, Britain, Germany, Italy, France, Japan and Canada.

"We must provide far-reaching help for self-help to financial institutions," said Axel Weber, a member of the governing council of the European Central Bank. "The alternative not to do anything is currently no alternative."

Italian Prime Minister Silvio Berlusconi floated the idea of temporarily closing major stock exchanges around the world next week. "There is talk of suspending the markets," he said, adding that such a radical step would give leaders time to coordinate a response. He later said it was only something he'd heard on the radio, Bloomberg Business News reported.

British Prime Minister Gordon Brown said he would urge other countries to commit massive infusions of public money to shore up their banks. On Wednesday, Brown announced a $670 billion rescue plan for banks in his country, including a program under which the government will acquire up to $88 billion in equity in several private banks.

"I am trying to persuade leaders to do exactly the same as we've done so we can get the whole system moving again," Brown told the BBC.

Nonetheless, London's FTSE 100 index dropped 8.85 percent Friday, extending its losses for the week to 21 percent. The pound fell to a five-year low against the dollar.

Two weeks after Germany's finance minister declared his country's banking sector to be "extremely stable," Chancellor Angela Merkel said the government would consider nationalizing weak banks if necessary. "No possibility can be fully ruled out," she said on a day when the nation's benchmark DAX index fell 7 percent.