(RTTNews) - The European markets opened lower on Monday and are falling sharply in early trade amid continued uncertainty about the fate of financial sector and the deepening credit crisis in Europe. Apart from this, the passage of a $700 billion rescue package for the U.S. financial sector by the U.S. House of Representatives on Friday and signed by President George Bush into law, failed to cheer investors.

At the same time, oil prices are falling as slowing global economic growth raised fears that the demand for oil would decline. In European trading, crude for the November contract is dropping $3.11 to $90.77.

Meanwhile, in early deals on Monday, the euro fell to a 13-month low against the U.S. dollar, 2 1/2 -year low against the yen and a 6 1/2-month low against the pound. Currently, the euro-dollar pair is worth 1.3610 and the euro-pound pair is trading at 0.7739. Further, as of now, against the yen, the euro is worth 140.96.

In U.S. on Friday, the Dow closed down 157 points or 1.5% at 10,325, the Nasdaq dropped 29 points or 1.5% to close at 1,947.39, and the S&P 500 gave away 15 points or 1.4% to finish at 1,099.

In the Asia-Pacific region Monday, Japan’s Nikkei and Australia’s All Ordinaries indexes closed down by 4.25% and 3.36% respectively. Meanwhile, China’s Shanghai Composite index fell 5.15%, South Korea’s KOSPI ended the day down by about 4.3% and Hong Kong’s Hang Seng index closed down by 4.63%.

Among the European indices, the FTSEurofirst 300 index of top European companies is slipping 0.94% to 1,047.61 and the narrower DJ Euro Stoxx 50 index is down 4.07% at 2,987.17.

Around Europe, U.K’s FTSE 100 index is falling by 120.29 points, or 2.47%, to 4.750.03 and France’s CAC 40 index is down 188.58 points, or 4.62%, at 3.892.17. Meanwhile, Germany’s DAX 30 index is plunging by 250.19 points or 4.32% to 5,546.84.

Financial stocks tumbled and took most of the points from the index. Commerzbank is plunging 20.66%, HBOS is tumbling 14.61%, Royal Bank of Scotland is losing 8% and Dexia is slumping 12.41%.

Hypo Real Estate is falling sharply by over 40% despite German officials clinching a renewed rescue deal for the property lender during the weekend. Among the other developments, French bank BNP Paribas agreed to buy troubled financial group Fortis and Italy’s leading bank UniCredit announced plans to raise new capital. Germany also announced a blanket bank deposit guarantee, following a similar move by Denmark.

On the economic front, the major economic data scheduled for release in Europe are the U.K’s industrial production report for August and the NIESR GDP estimate for September. In the U.S., traders have little economic reports to digest on Monday.

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Posted in Categories: Australia, Eurozone, Japan, Releases, Stocks, USA.

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