The world’s financial markets have again been taking a beating due to renewed worries about recession and Europe’s debt crisis.
European bourses suffered their biggest daily fall in two and a half years – with the top 300 shares down five percent at the close.
The sell off was on both sides of the Atlantic – the Dow Jones Industrial Average finished down 3.7 percent – made worse by a decline in factory activity in the US Mid-Atlantic region and an increase in the number of Americans claiming new jobless benefits last week. The S&P 500 lost 4.5 percent and the NASDAQ over five percent.
All of this stoked fears that major economies are facing further recession and indeed analysts at investment bank Morgan Stanley said the US and the euro zone are quote “dangerously close to recession”.
Banks were the biggest losers because of all the money they have lent to euro zone countries and concerns it won’t be repaid.
The euro slipped against the dollar and gold hit a new record high.