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G20 vow fails to halt stocks slide

A pledge to stabilise markets from the world's leading economies failed to reassure investors on Friday and stocks fell sharply again.

Finance ministers from the G20 countries meeting in Washington had pledged to "take all necessary actions to preserve the stability of the banking systems and financial markets" and to make sure banks have the cash they need to pay their day-to-day expenses.

The G20 statement on Thursday mostly reiterated pledges made earlier but the show of solidarity was enough to stem the losses in Europe ahead of an expected modest advance in the US.

Asian shares, however, continued to fall sharply, with South Korea's Kospi index posting a massive 5.7% decline.

"The selling pressure in Europe had eased overnight but stocks are pushing deeper into the red as the day progresses and markets remain heavily depressed on the year, suggesting policymakers have their work cut out for them," said Carl Campus, an analyst at BMO Capital Markets.

In Europe, France's CAC-40 was down 2.6% at 2,710 while the DAX in Germany was 3% lower at 5,010. The FTSE index of leading British shares was 1.7% lower at 4,955.

Wall Street was set for further falls at the opening following Thursday's slide. Dow futures were down 0.7% at 10,572 while the broader Standard & Poor's 500 futures fell 0.8% to 1,114.

While worrying about the global economy, following the Federal Reserve's warning earlier this week that the US economy faced sizeable downside risks and a raft of downbeat European and Asian economic indicators, investors continue to keep a close watch on developments in Greece.

Bank stocks have led the way down in recent days as investors fret over their potential exposure to the debts of Greece. Those fears have become more acute as the markets increasingly price in the likelihood of a Greek default.

Athens has had a series of meetings with its creditors this week to try to avoid that, but it is unclear whether it will be able to dig itself out of its debt hole, even with the help of billions from the European Union and the International Monetary Fund.

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