Global stocks shake with stress from US financial crisis

LONDON (AFP) — World stock markets reeled again on Wednesday on uncertainty over the unfolding US financial crisis and the prospect of more gloomy comment from US Federal Reserve chief Ben Bernanke.

Bernanke has warned of economic gloom and his next comments are anxiously awaited by investors, after the collapse of US bank IndyMac and a rescue for US mortgage-financing firms Fannie Mae and Freddie Mac.

The New York Times said that "a sense of economic gloom" had descended on Washington even though President George W. Bush had tried to reassure worried Americans about the country's banks on Tuesday.

Markets are worried that the deep strains in US finance could infect overseas companies since foreign investors have large exposure to American home loans, dealers said.

In Europe on Wednesday, London shares dived 1.19 percent after slumping on Tuesday to the lowest close since October 2005.

Paris shed ...