Shares are again volatile on the European stock exchanges. They fell sharply at the start of the day before rebounding somewhat with analysts saying the sell off had been over done.
In early trading the indexes hit fresh two-year lows. London lost just over five percent, Frankfurt over six percent, Madrid was down 3.4 and Paris a little over three percent.
The sell-off revolved not just around European debt but also fears of a second recession in in the USA which in turn would hit Asian markets.
Investor have lost confidence in the politicians and financial policymakers to stop the rot.
European Central Bank chief Jean-Claude Trichet has confirmed that the ECB is actively buying bonds in the secondary market, but not directly from the governments. He did not specify which countrys’ bonds, but he is likely to be talking about Spain and Italy.
Trichet also said EU countries should implement policies agreed on July 21 as soon as possible.
Asian markets closed on Tuesday having made further heavy losses.
On Monday in New York, the Dow Jones dropped 5.6 per cent, despite US President Barack Obama trying to reassure investors.