World stock markets fell further Tuesday as investors continued to fret about the global financial sector after AIG reported the biggest quarterly loss in corporate history, and HSBC Holdings PLC slashed its dividend and revealed it needed to raise nearly $18 billion from shareholders.

European financial services major HSBC Holdings Monday posted a steep decline in 2008 profits at $9.3 billion even as its India business grew by as much as 26 percent during the same period.

Global banking major HSBC has emerged as one of the worst sufferers of Bernard Madoffs alleged $50-billion fraud as the financial services firm has exposure of about one billion dollar in the investment manager's collapsed venture, a media report says.

British banking giant HSBC on Sunday said it has set up a five billion-dollar fund to support the day-to-day cash requirements of its small and medium business clients reeling under the pressure of economic downturn across the world.

The bank blamed the cuts among the 20,000-strong Hong Kong workforce on the deteriorating global economy and a pessimistic outlook for 2009, according to Radio Television Hong Kong.