WASHINGTON?Fears of a global recession intensified on Friday after US lawmakers dashed the auto industry's hopes of a rapid bailout and grim news of more mass job cuts piled up.
Stock exchanges endured another roller-coaster ride at the end of a brutal trading week as Japan said it was ready to take action if necessary to tackle wild swings in its financial markets.
The global meltdown claimed another high profile victim as a Russian property developer suspended construction of a Moscow skyscraper that was planned to be Europe's tallest building, Interfax news agency reported.
Billionaire developer Shalva Chigirinsky was quoted as saying the crisis had forced him to freeze work on the Russia Tower, which is to be 612 meters (2,008 feet) tall when completed.
"The project is frozen. We have made such a decision," Chigirinsky said in an interview with Interfax.
More governments meanwhile announced their readiness to intervene to protect businesses from the fallout of the crisis.
But Democrats in the US Congress put off a vote on a bailout for the "Big Three" auto manufacturers until at least December and ordered them to come up with a new restructuring plan.
Senate Majority leader Harry Reid said it was a "sad reality" that despite a bipartisan deal by senators from states which have millions of jobs depending on the industry, there was not yet sufficient support for a bailout.
He said the chiefs of Chrysler, Ford and General Motors must come up with a restructuring plan and Congress would consider whether to provide billions of dollars in funding in December.
While the US auto industry was being rebuffed, the head of Ford Germany said the European Union should make around Є40 billion ($50 billion) in loans available to the continent's ailing auto sector.
Bernhard Mattes said in an interview with Bild that such assistance would not be state aid but was "in order to allow all European carmakers the possibility to meet EU requirements on fuel efficiency and emissions etc more quickly."
The car industry's woes were highlighted again when Toyota Motor Corporation announced plans to cut 3,000 temporary jobs at its domestic plants in Japan in response to worsening sales.
On Wednesday PSA Peugeot Citroen announced plans to slash 3,550 jobs in France and two other Japanese firms said they were scrapping a total of 2,700 jobs.
"It's one car crash after another," said GFT derivatives head Martin Slaney in Australia.
"The risk of global economic recession is deepening by the day. The prospect of The Great Depression Two is a genuine one and is plain scaring investors."
The decision by US senators to delay any decision on whether to aid the auto industry rattled Wall Street, where the Dow Jones Industrial Average plunged 5.56 percent overnight.
Asian stocks spent much of the day in negative territory but then staged a late turnaround with dealers saying stocks appeared to have been oversold during several days of heavy falls, creating room for a rebound.
Tokyo ended 2.7 percent higher, Hong Kong closed 2.9 percent up and Sydney gained 1.9 percent.
Finance Minister Shoichi Nakagawa said Japan was ready to take action if necessary to tackle wild swings on Tokyo's financial markets.
"Whether it is the stock market or foreign exchange, sudden and extreme changes are not welcomed," Nakagawa told a press conference. "If we see such cases, we must take appropriate and necessary actions."
Singapore announced a US$1.5-billion package to help its businesses gain access to credit amid a recession in the city-state.
European stock markets enjoyed slight gains of more than one percent in early trade but some later fell back, with Frankfurt losing 0.34 percent and Paris 0.46 percent. London remained up 0.71 percent in the early afternoon.
The continent's economic woes were apparent in results of a new survey showing that business activity in the 15 nations sharing the euro slumped in November at the fastest pace on record.
The eurozone's purchasing managers' index (PMI), compiled by data and research group Markit, dropped to 39.7 points in November from 43.6 in October, according to an initial estimate.
EU Industry Commissioner Guenter Verheugen said European Union nations should be prepared to run budget deficits to get the bloc through the slowdown.
"In the good times members push for a balanced budget. In the bad times the taps should be opened," Verheugen said on Friday on German radio.
The European Commission is expected to present an economic stimulus program for the European Union worth Є130 billion ($160 billion) on Wednesday, according to EU officials.
