FRANKFURT (AFP) –
German exports slumped and Japan prepared another stimulus package on Wednesday as the global crisis further undercuts the old economic order, jolting investors hoping for a return to business as usual.
German exports, the key driver for Europe's biggest economy, plunged a record 23.1 percent in February, after a fall of 23 percent in January.
"The nightmare for German companies is not over yet," UniCredit economist Andreas Rees said, adding: "There are few signs that exports will stop shrinking anytime soon."
Meanwhile Japan's current account surplus more than halved in February as a collapse in exports kept the world's second-largest economy deep in recession.
Plummeting worldwide demand for its cars, machinery and high-tech goods has put Japan on course for its worst economic slump since World War II.
The surplus in the current account, the broadest measure of trade in goods and services, plunged 55.6 percent in February from a year earlier to about 1.12 trillion yen (11.1 billion dollars), the finance ministry said.
The trade surplus alone dived 80.4 percent to 202.1 billion yen as exports roughly halved, marking a record fall. Imports sank almost 45 percent, reflecting weak domestic demand, to leave the economy without any impetus.
Japanese press reports said the government might increase its economic stimulus package from 100 billion dollars to 150 billion dollars in an effort to get demand going again.
Japan's mighty car and electronics makers have been badly hurt by recession in major markets including the United States, Europe and Japan, with its major companies -- Sharp, Sony, Panasonic -- all in the red and cutting jobs.
World stock markets, which posted a sharp rally from early March on the hope that the worst of the global economic crisis was over, were weaker on Wednesday, extending losses on profit-taking and fear the gains may have been overdone.
In midday trade in Europe, London's FTSE 100 index of leading shares was down 0.89 percent, with Frankfurt off 0.85 percent and Paris down 1.08 percent.
In Asia, Tokyo lost 2.69 percent, Hong Kong fell more than 3.0 percent and Sydney dropped 2.34 percent, with financial and resources stocks hit the hardest.
A sharp overnight slump on Wall Street, down 2.34 percent, added to the pressure with investors rattled by a bad start to the US corporate earnings season when aluminium giant Alcoa posted a larger-than-expected quarterly net loss of 497 million dollars.
The results set "the tone for the whole reporting season and ... (the) chances are (that) we shall see further weakness as investors realise that hopes of an economic recovery contrast markedly with corporate earnings," VTB Capital analyst Ivan Ivanschenko said.
Markets also fell on Tuesday after gloomy Asian growth forecasts and news the eurozone economy sank deeper into recession last year than had been feared.
"Here we go again," said analyst Stuart Bennett at Calyon, the investment banking arm of French bank Credit Agricole.
"Another poor performance by stocks, disappointing figures from Alcoa and the prospect that the first quarter earning season will produce similarly sluggish figures from other companies has prompted the market to question the sustainability of the recent rise in global bourses," Bennet said.
Japan, China, India and wider Asia have built their economies on exports, mainly for the giant US market, but that model has been put in doubt as the American consumer is forced to save for the future rather than borrow and spend as if there was no tomorrow.