Europe’s major stock markets all finished the day down more than 1%, but they trimmed their losses after Federal Reserve Chairman Ben Bernanke said sharp slide in share prices had not changed the US central bank’s outlook for moderate economic growth there.
European oil producers and mining companies declined amid fears of an economic slowdown and falling demand in China. But analyst Nish Koteca believes the correction was a good thing. He said: “I hope it brings some sense back into the market in the sense of what the opportunities are and what is fair value, but I certainly don’t see the market impacted more than short term on this China news.”
Asian markets remained particularly nervous and volatile, even though China’s main Shanghai stock index recovered somewhat on Wednesday.
Shanghai’s 9% plunge on Tuesday due to regulatory concerns seems to have sparking the global selloff which saw the MSCI world stock market index lose all its gains for the year. At the start of the week it had been up 4% since 1st January.