LONDON — Stocks fell sharply worldwide today following declines on Wall Street last week amid investor pessimism over the American government’s stimulus plan to prevent a recession.

American markets were closed for Martin Luther King Jr. Day, but the downbeat mood from last week’s market declines there circled through Europe, Asia, and the Americas. Britain’s benchmark FTSE-100 slumped 5.5% to 5,578.20, France’s CAC-40 Index tumbled 6.8% to 4,744.15, and Germany’s blue-chip DAX 30 plunged 7.2% to 6,790.19.

In Asia, India’s benchmark stock index tumbled 7.4%, while Hong Kong’s blue-chip Hang Seng index plummeted 5.5% to 23,818.86, its biggest percentage drop since the September 11, 2001, terror attacks.

In Canada, the S&P/TSX composite index on the Toronto Stock Exchange fell 4.8%. Brazilian stocks plunged 6.6% on the main index of Sao Paulo’s Bovespa exchange, and Argentina’s benchmark Merval index fell 6.3% to close under 1,900 for the first time since August 2006.

Investors dumped shares because they were skeptical that an economic stimulus plan President Bush announced Friday would shore up the economy that has been battered by problems in its housing and credit markets. The plan, which requires approval by Congress, calls for about $145 billion worth of tax relief to encourage consumer spending.

“We’ve taken our lead from the Asian markets who have not been impressed by the U.S. There’s debate if there’s going to be a recession in the U.S. I don’t think there’s much chance of that though,” an analyst at Hargreaves Lansdown Stockbrokers Ltd. in London, Richard Hunter, said.

Concerns about the outlook for the American economy, a major export market for Asian companies, has sent the region’s markets sliding in 2008. Just last Wednesday, the Hang Seng index sank 5.4%.

“It’s another horrible day,” a general manager at Fulbright Securities in Hong Kong, Francis Lun, said. “Today it’s because of disappointment that the U.S. stimulus (package) is too little, too late, and investors feel it won’t help the economy recover.”

Japan’s benchmark Nikkei 225 index slid 3.9% to close at 13,325.94 points, its lowest close in more than two years. China’s Shanghai Composite index plunged 5.1%, partly on worries about mainland Chinese banks’ exposure to risky American mortgage investments.

“People are certainly nervous about a potential recession in the U.S. spilling over to the rest of the world,” the director of Asian Economic Forecasting at Action Economics in Singapore, David Cohen, said.

“Maybe there’s still some wariness about politicians are able to come up with a compromise and act sufficiently quickly” on a stimulus package, Mr. Cohen said. “I think the impact would be marginal anyway.”

Investors took cues from the negative reaction to the president’s plan on Wall Street on Friday, when the Dow Jones industrial average slid 0.5% to 12,099.30, bringing its loss for the year so far to nearly 9%.

Traders also have shrugged off assurances from the Federal Reserve chairman, Ben Bernanke, that the American central bank is ready to act aggressively — which means a likely big interest rate cut later this month — to help the sagging economy.

Some analysts predict that Asia won’t suffer dramatically from an American recession because increased trade and investment within Asia has made the region less reliant on America than in the past. Excluding Japan, 43% of Asia’s exports go to other nations in the region, Lehman Brothers calculates, up from 37% in 1995.

But today, uncertainty and pessimism reigned.

In Tokyo trading, exporters got hit hard, partly because of the yen’s recent strength against the dollar. Toyota Motor Corp. lost 3.3% and Honda Motor Co. sank 3.4%.

Shares of Bank of China dropped 6.4% in Hong Kong after the South China Morning Post newspaper reported that the bank is expected to announce a “significant write-down” in American subprime mortgage securities, citing unidentified sources. In Shanghai, the bank’s stock declined 4.1%.

India’s benchmark Sensex index fell 1,353 points, or 7.4% — its second-biggest percentage drop ever — to 17,605.35 points. At one point, it was down nearly 11%.

The decline hit companies across the board, with power utility Reliance Energy Ltd. falling 16.4%. Major software company Tata Consultancy Services Ltd. slid 7.6%.

Since the start of the year, Japan’s Nikkei index has declined 13%, while Hong Kong’s blue-chip index is down more than 14%. Even China’s Shanghai index — which nearly doubled last year — has fallen 6.6% over the same period and nearly 20% from its all-time closing high on October 16.