London's stock exchange shed more than $173 billion, its worst day since the September 11 terrorist attacks in 2001.

Fears of a recession in the United States led the London FTSE index to fall by 5.5 per cent, the market index in France fell by almost 6 per cent and in Germany by more than 7 per cent.

The European Union's Monetary Affairs Commissioner said the excess volatility in the markets is not good news, but cautioned that the fundamentals of the continental economies are sound.

One stock that did rise was the United Kingdom's Northern Rock, after the British Government said its public debt in the bank would be sold off as government backed bonds, in an effort to try and stave off either nationalisation or administration.- Source: By Australian Broadcasting Corporation