BRITISH and other European stock exchanges were battered by a global meltdown in share prices yesterday. Stocks tumbled across the Continent amid fears over the health of Asian economies, a sharp rise in the value of the dollar against the Japanese yen and a crisis in confidence in Russia's financial markets.

The frantic sell-off, which began overnight in New York and then spread like a contagion to Asia, wiped around #17bn off UK share values.

However, London-based analysts were quick to play down the long-term impact of the rout.

Jeremy Batstone, head of research at NatWest Stockbrokers, said: ''It's a knee-jerk reaction to the Dow and overnight markets on the back of the strength of the US dollar. But the fundamentals are there in the UK market and shares will ride out the short-lived storm.''

The British exchange's FTSE-100 benchmark index, down around 130 points at one stage, recovered slightly but still closed 100.5 points off at 5870.2.

The FTSE-250 midcap index lost 40.1 points to 5880.8 and June gilt futures finished the session marginally weaker at 109.01.

The Dow, which shed 150 points overnight, notched up more losses when dealing resumed and was more than 100 points down when the UK market closed for business.

''Asia's only one strand of the debate, Russia's another,'' said George Hodgson, pan-European equity strategist at ABN Amro Securities. ''But the big issue is still whether the United States is going to continue to retreat, particularly if the dollar sees a bit more strength coming into it as people fly to quality.''

The dollar continued to trade around seven-year highs against the yen last night.

A high greenback also adds to Asia's problems in repaying its dollar-denominated debt obligations.

The worst carnage was found in the fledgling Russian bourse where shares plunged by 10%.

Russian and foreign investors, panicking over press reports that the government could be preparing a devaluation of the currency, sold treasuries and shares, depressing the rouble and sending East European currencies slumping on foreign exchange markets.

The Polish zloty and the Czech crown, the region's top gainers in 1998, were hardest hit by the chaos in Moscow, but even the normally stoic Hungarian forint lost ground in the wake of foreign capital fleeing Russia.

The Russian Government later tripled interest rates to 150%, stabilising the rouble at least temporarily.

Most Continental bourses were sharply lower with Milan and Frankfurt the worst off.

The leading index in Milan fell by more than 3%, while Frankfurt's DAX-30 closed floor trading 2.72% weaker.

In Paris, the CAC-40 index - which had pushed to new records on Monday and Tuesday for a 37% rise on the year - ended down 98.51 points, or 2.39%, at 4017.37.

Earlier in Asia, where many economies are still suffering from last summer's financial crisis, stocks dived steeply, reacting to the overnight drop on Wall Street and regional difficulties that range from gloom about Hong Kong's economy to labour troubles in South Korea and the yen's weakness.

Among the worst hit was the Hong Kong market, where shares plummeted 5.26%. The territory's key Hang Seng index closed at 8983.43, a one-day loss of 498.78 points.

In Tokyo, the key Nikkei index closed 220.53 points, or 1.4%, lower at 15,664.29, while the Thai market hit a 10-year low.

Later in London, City stock traders looked on helplessly as their trading screens turned red, indicating massive selling.

Shares with Asian exposure were in the front line of the massacre with HSBC diving 109p to 1531p, a fall of 7%, and Standard Chartered crumbling 40.5p to 772p, a blow of 5%.

NatWest slimmed 30p to 1103p, Barclays was 42p off at 1650p, Alliance & Leicester eased 8p to 807p and the Woolwich slipped 1.5p to 353.5p.

However, the Halifax, which is fighting the Royal Bank of Scotland, down 5p at 1025p, for the hand of Birmingham Midshires, managed to defy gravity and gained 48p to 923p.

The rise was attributed to reports that Halifax, which has a war chest of more than #3000m to spend, had made an informal offer for the Royal Bank of Scotland.

Shares were also boosted by news that the group would be included on a prestigious index of the world's top companies.

Pharmaceuticals were also in the line of fire with Zeneca plunging 81.25p to 2481.25p, Glaxo Wellcome easing 49p to 1682p and SmithKline Beecham falling 20p to 672p.

Meanwhile, British Airways shrugged off the #125m cost of last year's bitter flight attendants' strike and damage to its industrial relations reputation.

Pre-tax profits came in ahead of expectations but were down from #640m to #580m.

The company fell 13.5p to 636.5p under the weight of the weakening market.

Music giant EMI, down 12p to 520p, said it planned to remain an independent force in the industry after talks recently fell through with Seagram.

The company announced a fall in pre-tax profits but these were in line with expectations.

Department store group Allders, up 3p to 239.5p, announced a rise in pre-tax profits despite the tough economic climate on the High Street.

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