US investors started the week in gloomy mood Major world stock markets have dropped sharply after Israel's killing of a leading Palestinian militant and amid concern at political tension in Taiwan. Analysts said investors were also acting on indications that the pace of global economic recovery was slowing.
New York's Dow Jones index closed 1.2% lower, while Europe's main markets closed down 2-3%.
Taiwan had earlier led Asian markets lower amid uncertainty over the island's disputed election result.
Political fears
"There's no question that there is a broad range of geopolitical concerns, whether it's Israel, Taiwan, Iraq or Spain," said Hugh Johnson, chief investment officer at First Albany Corp.
"The world is clearly a very unsettled and dangerous place, and that's demoralising to investors."
"There's concern about what's going on all over the world with regard to terrrorist activities," said Bill Strazzullo, vice president of State Street Global Markets.
Nervous investors knocked 1.9% off London's bluechip FTSE 100 stocks index on Monday.
Frankfurt's leading Dax 30 share index shed 2.3%, while in Paris the Cac 40 lost 2%.
The first anniversary of the start of the Iraq war at the weekend, and unease stirred by the Madrid bombings contributed to the anxious mood among European investors.
Mark McCutcheon of stockbrokers Gerrard said warnings from London's top police officer last week had brought the risk of attack "close to home".
Investors were also worried by the lacklustre global recovery.
Mr Johnson said investors were becoming more worried that company earnings and wider economic performance would fall short of forecasts.
High oil prices and a disappointingly weak US jobs market were factors in this, he said.
Hi-tech Taiwan
East Asian markets were unsettled by worries Taiwan's political prospects as protestors questioned the legitimacy of President Chen Shui-bian's wafer-thin electoral victory and the opposition asked the courts for a recount.
Taiwan's hi tech industries are global players, and it is home to the world's two biggest computer memory chip founderies.
New York listed shares in one of them, Taiwan Semiconductor Manufacturing Co (TSMC) plunged nearly 8% in late trade on Monday.
Falls on Taiwan's stock market were mirrored in Hong Kong and Japan.
