Mounting fears that the global economy is slipping back into recession washed through financial markets world-wide on Thursday.
Shares in Europe finished the day down almost five percent at a two year low. Wall Street and Asian stock markets also plunged deep into the red.
Along with the US central bank, the Federal Reserve, giving a grim outlook for the world’s largest economy, there were signs of slowing growth in China and Germany.
Chinese factory output fell again in September and business activity in Germany was weak.
Fund manager Marine Michel with Montsegur Finance in Paris said: “We still have the same concerns that the financial markets were dealing with this summer. And on top of that, we’ve got issues of growth in the United States, global forecasters revising their previsions down for euro zone members and the United States. So there are many elements weighing down on the markets and also on confidence and investor morale.”
The sell off was not just of shares. The euro was down close to one percent against the dollar.
And the stronger US currency hit things like oil and gold which are priced in dollars. US light crude tumbled over five percent and Brent crude lost nearly four percent in London.
Traders also appeared to be speculating that a global slowdown could dampen demand for commodities.