World markets fell Friday as investors were disheartened by weak corporate and economic figures and confirmation that Britain plunged into recession at the end of last year. Official data showed Britain's economy shrank 1.5 percent in the fourth quarter – the sharpest quarterly downturn since the early days of Margaret Thatcher's government almost 30 years ago. Friday's data sent the British pound sliding to a 23-year low versus the dollar and London's FTSE 100 index of top shares to under 4,000 points. The news that Samsung saw its first-ever quarterly loss came on the heels of Thursday's bleak US unemployment and housing figures and Microsoft's announcement of its first mass layoffs in its 34-year history. However, US stocks closed narrowly mixed Friday as investors worried about corporate earnings, the faltering financial sector and the government's ability to combat the recession. Paring early losses, the Dow Jones Industrial Average was down 50.89 points (0.63 percent) to 8,071.91 at the closing bell. The tech-heavy Nasdaq rose 11.61 points (0.79 percent) to 1,477.10 and the broad-market Standard & Poor's 500 index edged up 4.04 points (0.49 percent) to 831.54, according to preliminary closing figures. Britain's benchmark FTSE 100 index closed up a slight 0.01 percent to 4052.47. Germany's DAX closed down 0.96 percent at 4,178.94, and France's CAC 40 shed 0.71 percent to 2,849.14. Analysts said the general sharp deterioration in stock markets reveals an increasingly pessimistic outlook for the year ahead, with bad economic news coming thick and fast from all corners of the globe. That is pushing investors to drop riskier equities in favor of lower risk government bonds, or gold. Europe's losses followed even sharper drops in Asia, where Japan's Nikkei 225 dropped 3.8 percent to 7,745.25, while Hong Kong's Hang Seng Index eased 0.6 percent to 12,578.60 and South Korea's Kospi sank 2.1 percent to 1,093.40. Both financial and technology stocks were under pressure on fears a deeper global downturn would continue to weigh on corporate earnings. “The race to the bottom amid G-7 economies speeds up the risk-reduction trades as macroeconomic data pushes superlatives to higher levels,” said Ashraf Laidi, chief market strategist at CMC Markets. Meanwhile, the dollar notched a new 23 1/2-year high against the pound and gained strongly on the euro, but slipped versus the yen as a British recession was confirmed and more blue chips posted declining profits. The 16-nation euro fell to $1.2901 in afternoon trading Friday from $1.3021 late Thursday. The British pound traded at $1.3690, having rallied moderately after earlier sinking to a 23 1/2-year low of $1.3501 after the British government confirmed a second consecutive quarter of economic contraction. On Thursday, the pound was worth $1.3876. Analysts see more interest-rate cuts coming from the Bank of England, which could help support the dollar. Cutting rates theoretically gives a boost to economic activity, but can undermine a currency.
