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Share prices tumble

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Share prices tumble
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Wall Street rejoined the worldwide sell-off of shares on Thursday as soon as the New York stock exchanges opened.

US investors had actually been the first to plunge into the sea of red ink late on Wednesday after the head of the US central bank signalled that it could start scaling back its stimulus programme earlier-than-expected.

In addition, the minutes of the latest US Federal Reserve meeting showed some policymakers were open to reducing the bank’s large-scale asset purchases as early as next month.

The possible pullback in US stimulus also hit the Asian and European financial markets which were additionally spooked by unexpected weakness in China’s economy and business activity surveys showing the eurozone heading for a second quarter of economic contraction.

Banks and miners companies were the biggest losers in Europe.

The dollar fell against the euro while the Chinese factory data added to concerns about global growth, sending oil and copper prices down.

In the United States, financial data firm Markit said falling overseas demand and government belt-tightening at home helped push its US Manufacturing Purchasing Managers Index to a seven-month low of 51.9 in May from 52.1 the previous month. A reading above 50 indicates expansion.

Markit chief economist Chris Williamson said the data suggested that manufacturing, which had its best quarter in two years during the first three months of 2013, would provide only a modest boost to overall US growth in the second quarter.

But recent improvement in the US labour market, highlighted by a bigger-than-expected decline in applications for initial jobless benefits last week, and rising home prices have suggested the US economy is recovering more quickly than its peers.