Germany falls into recession

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Seeking to limit the fallout from a crisis which began when the U.S. housing market collapsed, Japan said it would offer up to $100 billion (67 billion pounds) to the International Monetary Fund (IMF) for emerging economies.

The impact of the worst financial conditions in 80 years was felt sharply in Germany, Europe's largest economy, where the economy contracted by 0.5 percent in the third quarter, putting it in recession for the first time in five years.

The decline was accentuated by a negative contribution from foreign trade as exports weakened.

"The headwinds of the financial crisis and the global economic slowdown are blowing right in the face of the German economy," said Carsten Brzeski of ING Financial Markets.

"Even more worrying, the full impact of the financial crisis still has to unfold," he said. "If you think today's numbers are already bad, just wait for the next quarter."

China, which has unveiled a 4 trillion yuan (393 billion pounds) stimulus package, also felt the ill effects of a global slowdown, with annual industrial output growth slumping to 8.2 percent in October, its weakest showing since October 2001.

Stock markets tumbled in Asia and Europe, spooked by worries that massive capital injections and emergency regulatory measures have failed to halt damage to the real economy.

Following a Wall Street sell-off that sent the Nasdaq to a 5-year low, Tokyo shares slid 5.3 percent and the price of oil fell to a 22-month low at $55 a barrel on worries that a recession will curb demand.

China was a rare bright spot, shares ending up 3.7 percent on hopes that the stimulus package would include big spending on housing and railway construction.

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