LONDON: World share prices tumbled on Wednesday on renewed worries about a global economic slowdown as the price of crude oil surged to a record high point above $100 a barrel, dealers said.
Japan s stock market closed down 3.25 percent after New York crude had reached an all-time peak of $100.10 a barrel on Tuesday on speculation that OPEC oil producers planned to cut output at a meeting in Vienna next month.
Rocketing oil prices weigh on companies costs and push up inflation, which in turn hurts economic growth.
British Airways said on Wednesday it planned to raise the fuel surcharges it places on air fares, citing high oil prices.
Approaching the half-way point in European stock market trading, London s FTSE 100 index of leading shares showed a loss of 1.30 percent. Frankfurt was down by 1.14 percent and Paris stood 1.01-percent lower.
Players are worrying about the further impact of oil over $100 on the economy, said a trader at a European brokerage who requested anonymity.
On Wednesday oil prices fell on profit-taking but remained close to $100 a barrel.
Concerns that high crude futures could stoke inflation and stall expected interest rate cuts in the ailing US economy helped send Australian stocks down more than two percent by the close.
There s a great deal of uncertainty out there, said Sydney-based Andrew Sekely, an equity analyst at Intersuisse.
Fears about a global economic slowdown, and possibly even a US recession, had already been stoked by the spreading of a global credit crunch caused by the US subprime mortgage crisis.
Reports on Wednesday that the squeeze on credit had hit US firm KKR Financial Holdings spooked investors and threw the spotlight back on the slowing global economy, dealers said.
Elsewhere in stock market trade, Taiwan closed down over 1.5 percent and South Korea ended the day nearly two percent lower. Hong Kong prices lost 2.21 percent.
Lackluster performance of Wall Street overnight and weakness in regional markets weighted on (Hong Kong) sentiment, said Chan Yuk-keung, a Hong Kong-based strategist at Philip Asset Management.
US stocks lost ground on Tuesday as an early rally fuelled by robust earnings from retail titan Wal-Mart faded on news of the jump in crude prices.
The Dow Jones Industrial Average closed down 0.09 percent and the tech-heavy Nasdaq composite shed 0.67 percent.
A strong early rally disintegrated and the Dow and Nasdaq closed lower in the face of $100 oil and record prices for other commodities, said Al Goldman, market strategist at AG Edwards.
Before oil struck $100, analysts said there was growing speculation that the Organization of Petroleum Exporting Countries (OPEC), which supplies about 40 percent of the world s oil, could cut output at its meeting on March 5.
OPEC had been expected to cut to prevent oversupply since demand for heating fuel was set to fall as winter ends in the northern hemisphere, said Darius Kowalczyk, a strategist at CFC Seymour Securities in Hong Kong. -AFP
