The New Nation - Internet Edition

AFP, London

Europe's main stock markets closed sharply lower on Friday after disappointing data in the United States sparked concern about slowing growth and the prospect of recession in the world's biggest economy.

In London the FTSE 100 index lost 2.02 percent to finish at 6,348.50 points, in Paris the CAC 40 fell 1.79 percent to 5,446.79 while in Frankfurt the Dax lost 1.26 percent to end the day at 7,808.69.

"Any hopes of the FTSE finishing the week above the key 6,500 level have seemingly been dashed with some far-worse-than- expected payroll data out of the US," said Jimmy Yates, a dealer at CMC Markets.

"Once again as the week draws to a close the prospect of a global recession is going to be dominating the thoughts of many."

The DJ Euro Stoxx 50 index of eurozone shares fell 1.45 percent to 4,270.53 points.

The European single currency fell to 1.4773 dollars.

US stocks plunged yesterday after the Labor Department said the US economy gained 18,000 nonfarm jobs in December as the unemployment rate rose to 5.0 percent.

The reading overturned market expectations of a 70,000 jobs increase and a 4.8 percent jobless rate, up from 4.7 percent in November.

The report showed the weakest job creation since 2003.

The Dow Jones Industrial Average tumbled 1.96 percent to close at 12,800.18 and the tech-heavy Nasdaq composite shed 2.46 percent to 2,504.65.

The broad-market Standard & Poor's 500 index lost 2.46 percent at 1,411.63.

Some analysts said the surprisingly weak labour report could lead the Federal Reserve to lower interest rates again, after a combined one percentage point reduction since September.

Japanese share prices slumped 4.0 percent yesterday, hitting the lowest level in 17 months as investors fretted about the health of the US economy and a surge in crude oil prices, dealers said.

They said that a stronger yen also rattled the Tokyo market on its first trading session of 2008 because of the negative impact on exporter earnings.

Back in Europe, in Paris shares in Renault lost 7.58 percent to 86.45 euros, closing at their lowest close since last March after Nissan, of which Renault owns 44 percent, reported that December sales fell 2.4 percent.