Fear drives world's financial markets

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Fear drives world's financial markets

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Friday has been another very turbulent day on the world’s financial markets, starting with a massive sell off of shares around Europe and then a rollercoaster ride, even as the latest figures showed the US economy creating more jobs than expected in July.

Investors remain very jittery and ready to jump at any sign of the global economy slowing and the euro zone’s debt problems spreading to Italy and Spain.

Investment fund manager Francois Chaulet of Montsegur Finance in Paris explained: “What is driving these falls is a change in the state of mind of investors. Previously, they were banking on a strong economic recovery and now the leading indicators are showing that the rate of growth is tending to reduce. “

Wall Street is very volatile despite the latest US jobs figures.

In July the total number of Americans in work increased by a better-than-expected 117,000.

The unemployment rate dipped to 9.1 percent of the workforce from 9.2 percent in June though experts said that was mostly due to people giving up on looking for jobs.

Fears are focused on the US sliding back into recession; like other countries around the world it is still carrying too much debt and they are not growing fast enough to pay back what they owe.

Europe’s worst offenders are Greece and Italy with France also a worry. And with the debt ceiling lifted US debt this year is predicted to hit 101 percent of GDP.

Economic expansion is the key: without it the market fear will continue and investors will not take risks. All this comes against a background of recent slowdowns in manufacturing in Europe, the US and China along with weak growth in countries’ gross domestic product.