Stock markets across the globe have fallen in the aftermath of the massive bomb blast on the Indonesian resort island of Bali over the weekend.

In the US, the Dow Jones industrial average slipped lower while the tech-based Nasdaq and broader S&P 500 indexes traded flat, after Asian and European markets absorbed most of the fall-out.

Markets in Europe all lost ground when they opened and stayed down during the trading day, with the FTSE 100 trading about half a percent lower, the German market losing over 2% and the French about 1%.

"The terror attack in Bali is taking its toll and cutting into gains," said Peter Cardillo, chief strategist at Global Partners Securities.

"I am not sure how long this new terrorist attack is going to actually weigh on the market, but obviously the global markets had somewhat of a nasty day already."

Many of Indonesia's neighbouring Asian markets made gains despite the bombing due to the strong US rally last week.

Asian wake

Explosions on the Indonesian island of Bali killed at least 183 people on Saturday and fuelled frenzied speculation that it marked the re-emergence of the al-Qaeda, which the US says was responsible for the 11 September attacks.

Indonesia's share index took the full-impact of the blast, losing more than 10% to close at a four-year low of 337.5 points.

Japan and Hong Kong were both closed for national holidays.

The Malaysia stock market closed down 1%, and in Thailand, the central bank moved to quell rumours that it had been forced to prop up the currency.

In the Philippines, the peso hit a 14-month low, and the head of the Manila Stock Exchange warned that shares could fall another 6-7% as a result.

And although the Australian dollar and stock market shrugged off the gloom, certain shares - especially airline Qantas - fell sharply on fears of weaker tourism.