*World markets slump on US woes*

US and European shares plunged on Wednesday, damaged by a weak dollar,
an oil price spike and continued fears for the US economy.

On Wall Street the Dow Jones index went into the Thanksgiving holiday
having slumped by more than 200 points.

The UK's FTSE 100 closed 2.5% down while Germany's Dax index lost 1.5%
and France's Cac slipped 2.3%.

The heavy falls came a day after the US Federal Reserve cut its growth
forecast - stoking fears of a slowdown.

The central bank now sees the US economy growing by between 1.8% and
2.5% in 2008, compared to its previous forecast of between 2.5% to 2.75%.

And this saw the dollar hitting yet another low against the dollar
against the euro, which hit a an all-time peak of 1.4870 dollars in
Wednesday's trading.

Financial jitters

In the US the worries saw the Dow Jones index plummeting 211 points,
1.6% to 12,799 while the Nasdaq fell 1.3%, 34.7 points to 2,562.2.

"We just can't seem to break free of the financial concerns that are out
there," said Bucky Hellwig, of Alabama-based Morgan Asset Management

"The unwinding of the real estate and the mortgage market continues to
weigh on investor concerns."

Earlier Japan's Nikkei-225 index had lost 2.5% and the Hang Seng shed 4.2%.

In the UK, revised growth forecast hit financial stocks hardest.

"There is so much uncertainty out there, the market is probably quite
good value but no one has got the guts to backing the truck up and
buying it in," Cantor Index's David Buik said.

Oil reaching a high of $99.29 per barrel lifted Royal Dutch Shell which
clocked gains of 1.8%.

Falling share prices boosted demand for government bonds, seen as a safe
haven in troubled times.

Dollar pressure

The continuing dollar weakness has been sparked by the US mortgage debt
crisis, which has led to a growing number of American banks revealing
multi-million dollar losses.

US Treasury Secretary Henry Paulson told the Wall Street Journal that
the number of potential home loan defaults "will be significantly
bigger" in 2008 than in 2007.

Analysts now expect the Federal Reserve to cut US interest rates further
when it meets in December in an effort to ease problems in both the
housing and credit markets.

As worries over the economy continued, investors turned to the safety of
government securities, pushing the yield on the Treasury's 10-year note
below 4% for the first time since 2005.