The mayhem in global markets continued this week, as the financial contagion deepened in Europe, and even spread to Japan later in the week. Equity markets across the globe plunged badly amid mounting fears that the worst financial crisis since the Great Depression would result in a prolonged and painful global recession. The incessant carnage prompted governments and regulators to take more emergency steps to try and stop the bloodshed.

But, all the efforts yielded little results, as the MSCI World Index suffered its worst week in more than three decades. The Nikkei in Japan lost a fourth of its value while the Hang Seng dropped 16%. The FTSE 100 in London fell below 4,000 for the first time in more than five years. The Dow Jones Industrial Average sank under 9,000 for the first time since 2003. The Nasdaq fell below 1,700 and the S&P 500 plunged into triple digits.

Russian stock exchanges delayed the opening of trading and Indonesia extended a two-day halt. Iceland suspended equity trading until Oct. 13 after the government seized Kaupthing hf, the country's biggest bank. Russia's government said it will start buying stocks of domestic companies next week to help support prices. Consob, Italy's securities-market regulator, banned all short sales on the country's stocks.

The cost of borrowing in dollars in London for three months rose as cash injections and interest-rate cuts by 10 major central banks failed to unlock the frozen money markets. The cost to protect corporate bonds from default soared to records around the world on investor concerns that the deepening credit crisis will trigger more failures as companies struggle to finance their businesses.

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