World stocks hit 5-1/2 year low

By Carolyn Cohn

LONDON (Reuters) - World stocks hit 5-1/2 year lows and oil hit 22-month troughs on Thursday on worries over bank giant Citigroup and U.S. automakers, though they trimmed losses on an increased Saudi stake in Citi and a Swiss rate cut.

Citigroup Inc shares tumbled to a 13-year low on Wednesday as investors questioned the survival prospects of the U.S. banking giant.

But the shares rose in pre-market trading on Thursday after Saudi Prince Alwaleed said he had boosted his stake in Citigroup back to 5 percent from less than 4 percent.

The Swiss National Bank cut rates by 100 basis points on Thursday to a target range for 3-month Swiss franc Libor of 0.5-1.5 percent, joining central banks elsewhere who have cut rates sharply to boost their economies.

"This move clearly signals that the SNB are concerned about deflationary risks. This joins them with the Fed and BoE who have also expressed similar concerns in recent weeks," said UBS analysts in a client note.

The MSCI world equity index fell to 197.72, its lowest since May 2003, and was trading at 198.52 at 7:50 a.m. EST, down 2.04 percent on the day.

U.S. stock futures were down 0.79 percent and the FTSEurofirst 300 index of leading European shares was down 2.5 percent, after earlier hitting a 5-1/2 year low.