China's central bank unveiled its fifth interest rate cut since September, but it failed to stimulate investors concerned at the scale of the downturn being felt across the globe.

South Korea announced measures aimed at shoring up its key shipbuilding and construction sectors, creating a task force to assess companies' finances and force the unviable ones to restructure.

"Basically, the government will focus on salvaging firms by injecting fresh funds or putting them under debt rescheduling programmes," Kim Jong-Chang, the head of the Financial Supervisory Service, told reporters.

South Korea, home to seven of the world's top 10 shipyards, has won record orders in recent years but they are now facing a sharp decline in orders.

Meanwhile Hynix Semiconductor, the world's second largest memory chipmaker, won an injection of nearly 600 million dollars from its creditors to help the South Korean group tackle falling demand and lower chip prices.

The jobs fears were crystallised by Angel Gurria, head of the Organisation for Economic Cooperation and Development in Paris, who said the slowdown could put 25 million people out of work between now and 2010.

He told French radio a recession in the OECD's 30 industrialised economies would continue for much of next year, with weak growth the year after.

While huge attention has gone to big names such as troubled US auto giants GM and Chrysler, which have been granted a huge emergency government loan to save them from almost certain bankruptcy, the effect on jobs is worldwide.

Malaysia's human resources minister said more than 4,700 people would lose their jobs in the country over the next three months as the electronics sector is hit by the downturn.

US heavy equipment maker Caterpillar said it was implementing "significant compensation reductions" for employees as well as freezing hiring and would implement temporary factory shutdowns and layoffs as needed.

The news came after Japan's Toyota, set to be the world's biggest automaker this year, announced cutbacks as it faces its first loss since it started reporting earnings in 1941.

In Wellington, official data show New Zealand's recession has now extended into a third quarter, and economists believe it will last well into 2009.

Beijing's rate cut came as a growing amount of data shows China's growth is being affected by the global financial crisis, especially as overseas markets for the nation's exports are drying up.

Growth of the heavily export-dependent Chinese economy fell to nine percent in the third quarter of this year, and the World Bank predicts it will grow by just 7.5 percent in 2009 -- a level not seen in 19 years.

China's rate cut was smaller than analysts had hoped for and hit sentiment in Shanghai, which shed 4.55 percent, and Hong Kong, where the Hang Seng index ended down 2.8 percent.

South Korea's woes saw Seoul lose three percent, Taipei shed 2.86 percent, and Sydney 0.7 percent. Tokyo was closed for a public holiday.

The Dow Jones Industrial Average fell 0.69 percent Monday, the Nasdaq 2.04 percent and the broad Standard & Poor's 500 index 1.83 percent.

In Europe, the London FTSE index of leading shares fell 0.88 percent at its close Monday, while the Paris CAC 40 eased 2.31 percent and the Frankfurt Dax 1.23 percent.

Oil prices fell further below 40 dollars in Asian trade Tuesday on falling global demand, meaning the commodity has lost around three quarters of July's record high of above 147 dollars.

"The market is in freefall," said Mark Pervan, senior commodities analyst with ANZ bank in Melbourne.

New York's main futures contract, light sweet crude for February delivery, shed 60 cents to 39.31 dollars per barrel, while Brent North Sea crude fell 57 cents to 40.88 dollars a barrel.

burs/km/dan

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