After a relatively positive start to trading on Monday European stock markets are becoming more volatile. It seemed as if measures announced by the European Central Bank at the weekend had succeeded in restoring some confidence, with most indexes starting only slightly down and in some cases up a few points.
Faring batter than the region’s other bourses were Madrid and Milan after indications from the ECB that it would buy up Spanish and Italian government bonds.
Elsewhere there were also modest gains but by mid-morning virtually all European stock markets were showing falls of two to three per cent.
In Asia the markets closed on a negative note, reacting not so much to Europe as to the downgrading of the US credit status.
Tokyo’s Nikkei dropped 2.2 per cent, Shanghai 3.8, Hong Kong fell four percent, Singapore five percent and South Korea more than seven percent.
Asian countries are heavily exposed to American debt because they are its largest creditors.
All the uncertainty has caused investors to rush for the historical safety of gold which reached a record high of just over 1700 dollars an ounce.