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European markets in the red again

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European markets in the red again

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Wednesday was another grim day for European shares which ended down just over three percent after choppy trading.

Banks’s slumped, along with mining companies, while safe haven stocks like pharmaceuticals and telecoms performed better.

US Treasury Secretary Henry Paulson’s revelation of a change of course in Washington’s rescue plan increased investors’ worries about the scale of the US economy’s problems.

In Hong Kong, market stategist Dariusz Kowalzyk said it is a truly global problem: “Investors are really concerned that the global recession is going to hit the companies here really badly, and that businesses will earn much less, or generate higher losses.”

The falling markets, and expectations of weaker energy demand, caused a further dramatic slide in oil prices which are now at their lowest in 20 months.

Both Moscow’s bourses suspended trading because of the size of the falls of stocks there. The pound hit a record low versus the euro and a six year low against the dollar as the Bank of England predicted the British economy will shrink sharply next year.