European shares experienced another big down day on Tuesday and closed almost four per cent lower. Financial shares and commodity producers slumped on worries about economic and corporate growth.
A new survey showed German investor sentiment improved in November thanks to government moves to shield banks and boost the economy, but Frankfurt still dropped 5.25 percent.
London trader Nick Parson said the markets have not bottomed out yet: “I think the economic outlook and the corporate earnings outlook is going to deteriorate still further… and in fact we’re still going to see further deterioration from here. So we’d be arguing for a very cautious approach to equity markets from here, even though we’ve had enormous declines so far.”
Echoing that sentiment, Morgan Stanley analysts are forecasting the euro zone economy is likely to contract 0.7 seven percent next year.