Footsie slide as Tokyo takes dive

THE misery on world financial markets worsened today as Japanese shares plummeted to 19-year lows amid growing concerns that Asia could plunge into recession. The latest dose of Asian bad news and last night's 183-point fall in the Dow Jones in New York sparked an early 45-point drop in London'se FTSE 100 index to 3860.2.

Japanese traders said that Tokyo's latest sell-off, which saw the Nikkei 225 Average close at its lowest since August 1983, was triggered by a belief that the Japanese government was about to unveil tough measures to deal with the country's baddebt crisis, putting further pressure on highly-geared investors.

The worries were compounded by the longshoremen's strike on the West Coast of the US, which some say will increase the chance of a recession in the Asian region. Mounting concerns over Wall Street, the US economy, a Gulf war and poor earnings were magnified by a warning from Morgan Stanley economist Andy Xie that the shutdown of 29 ports on the West Coast would push Asia's economies into recession if it continued for more than a month.

Exports could also be hurt by a build-up of stocks as the ports row escalated, he suggested. Technology shares led falls in the Asia-Pacific region and computer-related shares in Tokyo fell by up to 3%, further depressed by a missed sales forecast by US chip giant Advanced Microelectronics.

The Nikkei Average tumbled 125.99 points to 8983.36, with shares in trading companies and banks bearing the brunt of the damage.