A grim outlook for the US economy from the Federal Reserve and signs of slowing in China and Germany drove world financial markets deep into the red on Thursday.
Share indexes at the biggest European bourses dived over four percent; overnight Tokyo fell two percent and Hong Kong nearly five percent.
Investors were rattled by the statement from the Fed that there are “significant downside risks” to the US economy as it unveiled a bond buying programme that didn’t satisfy the markets:
Analyst Robert Halver with Baader Bank in Frankfurt said: “The Fed did not do the right thing. The markets had expected even more to stimulate the US economy. We have a political crisis, a financial crisis, a banking crisis and is very bad for the markets, for the mood.”
On top of that Chinese factory output fell again in September and business activity in Germany was weak.
The euro is down one percent against the dollar and oil prices also slumped.