Stock markets continue to take a beating with investors afraid that the efforts of governments around the world are not going to be able to avert a recession.
European shares fell for the fifth day running on Monday and ended almost three per cent down, but they had been lower earlier in the session.
Hints of interest rate cuts from the European Central Bank helped together with a bit of a bounce from across the Atlantic.
In Frankfurt one trader said: “Things picked up as a result of Wall Street being relatively stable in early trading. Then, there were the remarks from Jean Claude Trichet who made it clear that there could be a rate cut next week.”
However trillions of euros have been wiped off the market value of stocks this month as the sell off has accelerated.
Banks shares continued to be worst him.
The Frankfurt Stock Exchange was the only one in Europe to end the day in the black, but that was only because of exceptional trading of Volkswagen’s shares.
VW shot up on 147 percent to 520 euros after sports car maker Porsche announced plans to increase its stake in the car maker next year.
It revealed that, through options, it already has indirect control of almost three quarters of the stock.
There are technical reasons for the huge rise; investors, who had bet that the VW share price would go down, were desperate to lay their hands on the few remaining shares in the market.
The deteriorating world economic climate and its likely impact on demand for fuel pulled oil prices further down.
At one stage they reached their lowest in almost a year and a half before recovering slightly.