* Global stocks tumble to 5-year low, Wall St set to plunge
* European stocks down 8 pct, Japan's Nikkei down 9.6 pct
* Dollar and yen soar in risk flight, talk of intervention
* Oil slides more than 7 percent to less than $63 per barrel
By Mike Dolan and Jeremy Gaunt
LONDON, Oct 24 (Reuters) - Global stock markets plunged
again on Friday to their lowest in five years and major currency
rates gyrated wildly on intense concern about a worldwide
recession, corporate damage and fragile emerging markets.
Wall Street stock index futures, pointing to large U.S.
losses later, were frozen on and off as they fell as much as
rules allow in one day.
European shares lost more than 8 percent and Japan's Nikkei
<> tumbled almost 10 percent.
The dollar and yen -- considered among the safer currencies
-- surged to multi-year highs against European currencies such
as the euro and sterling as investors repatriated investments in
search of shelter and speculation of global interest rate cuts
weakened those currencies with the highest rates now.
Japan's huge external surpluses and already rock bottom
interest rates saw the yen outperform, with the dollar/yen
<JPY=> exchange rate losing more than six percent at one point
to a 13-year low of 90.95 yen.
The disorderly nature of the moves, which catapulted
one-month dollar/yen implied volatility <JPY1MO=> up to 20
percentage points higher at one point on Friday to as high as 45
percent, fuelled speculation about Group of Seven central bank
intervention to stabilise markets.
"The scale of the recent currency moves will most likely
rekindle intervention talks," said Audrey Childe-Freeman,
currency strategist at Brown Brothers Harriman. "The question
here is: have recent moves been excessive? The answer is yes."
MSCI's all-country world index <.MIWD00000PUS> was down 3.8
percent at five-year lows and its emerging market benchmark
<.MSCIEF> down almost 7 percent.
The emerging market stock index has now lost more than 15
percent this week and has wiped out all its massive gains from
the last four years.
"Equities have crashed. There is a fear the credit crunch
has swung from banks to sovereign nations and there is a belief
there is only a matter of time before countries start going bust
and defaulting on debt," said Jim Wood-Smith, head of research
at Williams de Broe.
"There is a flight to the two perceived safe currencies to
the dollar and the yen. There is a state of general panic. We
are in a self feeding bear market with all news deemed to be bad
news," added Wood-Smith.
Although interbank lending rates remained steady on Friday,
the stress in the wider credit market intensified.
The investment grade Markit iTraxx Europe index
<ITEEU5Y=GF>, which measures debt default risks, clocked its
biggest one-day rise ever of almost 20 percent to new records.
The financial crisis has now spread far beyond the banking
sector, with electronics maker Sony Corp and U.S. online
retailer Amazon.com Inc cutting their forecasts in the face of
weakening consumer demand.
South Korea led the decline on Friday with shares falling 11
percent, leading to a brokerage industry group asking its
members to stop selling shares to save the country from more
losses.
In Europe, the FTSEurofirst 300 index <> was down 7.2
percent having earlier hit its lowest level since mid-2003.
"All of the major developed economies are either in
recession or slipping into recession currently and the growth
rates in emerging economies are slowing very significantly as
well," said Darren Winder, strategist at Cazenove in London.
"People are finding it very hard at the moment to get any
confidence about what the forces for recovery can be.
Earlier, Japan's Nikkei slid 9.6 percent or 811.90 points to
7,649.08, a 5-1/2 year closing low. The benchmark lost 12
percent in the week and has fallen 50 percent so far this year.
DOLLAR, YEN SOAR
The dollar hit two year highs versus a basket of currencies
<.DXY> and the euro <EUR=>, and sterling hit a six-year low
<GBP=>, reflecting heavy dollar repatriation.
The euro was down 3 percent at $1.2595. Sterling lost 4.5
percent to $1.5580.
"Its extreme risk aversion and deleveraging of risky assets
... and we are seeing safe-haven flows into dollar and yen,"
said Lee Hardman, currency economist at BTM-UFJ.
Oil slid another $3 a barrel on Friday as gloom about a
global economic downturn that is sapping fuel demand took the
steam out of an OPEC agreement to cut output.
Ministers of the Organization of the Petroleum Exporting
Countries agreed at an emergency meeting in Vienna to take 1.5
million barrels a day of crude, about 5 percent of its supply,
off the world market.
But traders said OPEC's action might not be enough to halt a
slide that has seen oil drop from a record $147 a barrel in
July.
"Already we've seen demand destruction of 2 million barrels
per day. I'm not convinced this cut will be enough to stop the
slide." said Rob Laughlin, at broker MF Global.
Euro zone government bond prices leapt higher. Two-year bond
yields <EU2YT=RR> were 16 basis points lower at 2.606 percent
and 10-year yields <EU10YT=RR> lost 9 basis points to 3.698
percent.
(Additional reporting by Rebekah Curtis, Joanne Frearson,
Veronica Brown, Jane Merrimanm; editing by Chris Pizzey)
