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Germany warned Wednesday it would suffer one of the worst recessions in the developed world this year, with growth shrinking 6.0 percent, as global corporate titans logged big losses and plunging profits.
Stock markets however shrugged off fears that the swine flu outbreak could further dampen economic momentum. Asian exchanges closed with solid gains and Europe opened stronger.
Investors and analysts were also awaiting key US data later in the day, with US growth predicted to have contracted an annual 4.9 percent, a stark reminder of the depth of recession in the world's leading economy.
But the projected first quarter decline would represents an improvement from the 6.3 percent contraction in fourth quarter 2008, bolstering Federal Reserve chief Ben Bernanke's claim that the pace of US economic deterioration had slowed.
There was positive news too from Europe, where business and consumer confidence rose in April for the first time in nearly two years, according to a European Union survey that added to signs of stabilisation in the 27-member bloc.
But casting a shadow over the continent was a report from its largest economy, Germany, where output is foreseen declining by 6.0 percent this year.
The latest estimate was a sharp downward revision from the government's projections published last year of a 2.25 percent contraction.
If the 6.0 slump is confirmed, only Japan among major economies would suffer a worse recession, with a predicted 6.2 percent decline this year according to the latest projections from the International Monetary Fund.
"The economic decline that we are expecting this year is predominantly the consequence of the massive global slump and the related massive decline in our exports," said Economy Minister Karl-Theodor zu Guttenberg in a statement.
Another EU and eurozone member, Ireland, could suffer an 11.6 percent fall in gross domestic product in 2008-2011, the country's Economic and Social Research Institute reported.
"By historic and international standards, this is a truly dramatic development," ESRI said in a statement.
Wednesday also saw a spate of depressing earnings reports -- either outright losses or profit plunges -- from some of the world's most influential companies active in such critical sectors as oil, steel, banking and auto parts.
British energy group Royal Dutch Shell revealed that that first-quarter net profit fell 62 percent to 3.488 billion dollars (2.645 billion euros) as oil prices slumped in an economic downturn.
Dwindling economic activity has also taken a heavy toll on ArcelorMittal, the world's leading steel producer.
Arcelor reported a net loss of 1.063 billion dollars in the first quarter after a profit of 3.614 billion dollars in first quarter 2008.
Elsewhere, Spain's largest bank, Santander, said it suffered a 5.0 percent fall in first quarter net profit, German auto parts group Contiental said its net loss in the first quarter came to 267.3 million euros and German pharmaceutical giant Bayer reported a 44 percent slide in net earnings from January to March.
The German industrial giant Siemens meanwhile lowered its full-year operating profit forecast by 17.5 percent even as it presented strong quarterly results.
Global stock markets, despite a torrent of bleak macroeconomic and corporate news, showed surprising resilience.
Europe's main exchanges won back ground as investor fears over the swine flu outbreak eased following news of resurgent economic confidence in the recession-hit eurozone.
In late morning deals, London's FTSE 100 of leading shares rose 0.79 percent to 4,128.93 points. Frankfurt's DAX 30 added 0.88 percent to 4,647.95 points and the Paris CAC 40 won 1.24 percent to 3,089.01 points.
"Investors seem to have shrugged off the swine flu fears," said City Index analyst Joshua Raymond.
"Markets, like the UK weather at this time of year, are changeable, moving from the prospective gloom of swine flu to data-related optimism in the space of a trading session," said Calyon bank's analyst Daragh Maher.
"But the overall message remains one of uncertainty, a lack of clarity and an unwillingness to extend any trend too far."
Asian markets earlier in the day closed with clear gains as well.
