Asian and European shares fell on Friday - with Tokyo shedding 2% at close - amid general uncertainty regarding the outcome of the US House of Representatives' vote on a revamped financial rescue package.
Find out more about the origins of the greatest financial crisis in decades and watch Professor Gerardo Della Paolera explain how we got there.
Read "How to spend $700 billion".
Meanwhile, commodity markets return to Earth: read Douglas Herbert's analysis.
Stock markets fell Friday in Asia and Europe after heavy overnight Wall Street losses, ahead of another vital vote by US lawmakers on a multi-billion-dollar rescue for the financial sector.
The House of Representatives in Washington was set to vote on a revised plan to spend 700 billion dollars (505 billion euros) on a rescue package that the government hopes will ease pressure on the economy.
"All eyes will be on the US House of Representatives today, where a second vote is expected on the proposals after representatives rejected the plans put forward earlier this week," said Barclays Capital analyst Nick Verdi.
Despite being resoundingly passed by the Senate on Wednesday night, investors are still worried that the House will reject it -- as it did on Monday, sending world markets into a tailspin.
In early morning European trading, London stocks slipped 0.60 percent, Paris dipped 0.48 percent and Frankfurt slid 0.08 percent. All three markets had shed about two percent in value on Thursday.
Most Asian bourses fell sharply on Friday. Tokyo slid two percent at close, Hong Kong was down 2.1 percent at noon and Sydney shed 1.4 percent. Seoul and Shanghai were shut for public holidays.
Taipei clawed back earlier losses to post a 0.7 percent gain on bargain-hunting.
US House Speaker Nancy Pelosi moved to boost confidence that the bailout bill would get the green light, but there were lingering doubts about its eventual impact.
"Despite the fact that it passed overwhelmingly in the Senate, its passage isn't guaranteed in the House," said John Wilson, equity strategist at Morgan Keegan in the United States.
"I would expect the financial markets to breathe a sigh of relief when the (the bill) passes, but I don't expect the clouds to part and a host of angels to appear in the heavens singing hallelujahs."
Dealers on Friday were taking their cue from Wall Street, where the Dow Jones Industrial Average sank 3.22 percent to a three-year low on Thursday.
That came days after its biggest single-day points loss on record following the House's defeat of the first bailout plan.
Market sentiment was also weak due to bad news about the US economy, said Kazuhiro Takahashi, equities chief at Daiwa Securities SMBC in Tokyo.
"Even if the House passes the bill, we cannot expect markets to recover given the weak economy," said Takahashi.
Sentiment was also dented by wider economic woes as a jump in weekly US jobless claims to 497,000 highlighted ongoing fears.
A separate US report showed a 4.0 percent drop in August factory orders.
In a bid to ease pressure on the Nikkei, the Bank of Japan pumped 800 billion yen (7.6 billion dollars) into the market, the 13th straight business day it has done so.
But that was not enough to stop the Tokyo index plunging to a three-year low.
Oil prices also fell as traders continued to fret about the global economy and its impact on energy demand.
Global equities have been battered in recent weeks following the collapse of Wall Street titan Lehman Brothers, the buyout of Merrill Lynch and the government bailout of insurer American International Group.
Date created : 2008-10-03