Open

Coming up

Don't miss

Replay


LATEST SHOWS

IN THE PAPERS

Shifts in the propaganda war waged between Israelis and Palestinians

Read more

IN THE PAPERS

French MPs face quandary in pro-Palestinian rallies

Read more

THE INTERVIEW

Yezid Sayigh, Senior Associate at the Carnegie Middle East Center in Beirut

Read more

#TECH 24

Mind the Gender Gap : getting more women into the tech sector

Read more

INSIDE THE AMERICAS

Bolivian children: heading to work aged 10

Read more

WEB NEWS

Israel and Hamas battle online over public opinion

Read more

FOCUS

Can Chancellor Merkel's winning streak last?

Read more

FOCUS

Hunger in a fertile land...

Read more

DEBATE

Nigeria: One Hundred Days and Counting (part 2)

Read more

  • Live: Air Algérie flight missing over northern Mali

    Read more

  • ‘Many’ French passengers on board missing Algerian plane

    Read more

  • Iraqi parliament elects moderate Kurd as president

    Read more

  • Sudanese Christian woman sentenced to death arrives in Italy

    Read more

  • No end to fighting until Israel ends Gaza blockade, Hamas says

    Read more

  • Two foreign women shot dead in western Afghanistan

    Read more

  • At least 60 killed in attack on prison convoy near Baghdad

    Read more

  • Cycling is ‘winning the war on doping,’ says expert

    Read more

  • Ceasefire agreed for Central African Republic

    Read more

  • Can Jew-kissing-Arab selfie give peace a viral chance?

    Read more

  • In pictures: Thousands march for Gaza peace in Paris

    Read more

  • France charges Swiss bank UBS with tax fraud

    Read more

  • Israel faces heightened diplomatic pressure as Gaza violence rages

    Read more

  • Botched Arizona execution takes nearly two hours

    Read more

  • Bomb attacks leave scores dead in north Nigeria

    Read more

Business

European shares plunge amid global recession fears

Video by Yuka ROYER

Text by News Wires

Latest update : 2011-08-19

European stock markets closed lower Friday amid mounting concerns that the world’s major economies could be heading for recession and that policymakers have no solutions for the Euro zone debt crisis.

AP - Global stocks fell again Friday as fears of a possible U.S. recession combined with ongoing worries over Europe’s debt crisis, which is stoking acute fears over the continent’s banking sector.

However, smaller than anticipated losses on Wall Street helped European markets recoup a large chunk of their earlier losses by the close. In Europe, Britain’s FTSE 100 closed down 1 percent at 5,040.76 while Germany’s DAX fell 2.2 percent to 5,480. France’s CAC-40 ended down 1.9 percent at 3,016.99.

In the U.S., the Dow Jones industrial average was down 0.4 percent at 10,944 while the broader Standard & Poor’s 500 index fell 0.2 percent at 1,138. Futures markets had been predicting far bigger declines earlier.

The market turmoil of the last two days has dashed any hopes of a quiet second half of August - a normally quiet period when trading dries up until the U.S. returns from the Labor Day holiday in early September.

Financial markets have wrestled for several weeks with fears that a new recession in the U.S. is in the offing. Another round of soft economic data further spooked investors all round the world.

A woeful manufacturing survey Thursday from the Federal Reserve Bank of Philadelphia renewed U.S. recession fears in particular.
A parallel concern centers on Europe after a Franco-German summit earlier this week failed to persuade investors a convincing fix to the spiraling debt crisis was imminent.

The leaders promised further economic integration but no concrete measures like eurobonds, which would spread the risk among the 17 nations using the common currency.

"This week has seen a continuation of the trend of weaker than expected data and political reaction to the European problems which pretty much amounts to ‘Let’s have a get together a couple of times a year," said Gary Jenkins, an analyst at Evolution Securities. Banks have borne the brunt of the selling in the markets on renewed worries of the health of the continent’s banks, while safe-haven gold prices nudged up against the $2,000 an ounce mark, and crude prices fell as investors feared a global slowdown will zap demand for crude. Europe’s banks have also been hit by indications from German Chancellor Angela Merkel and French President Nicolas Sarkozy that their countries were developing a plan to tax financial transactions.

In an effort to smooth out that turbulence, France’s stock market regulator put in place a ban on short-selling last week, preventing traders from betting on the decline in a share’s price. Other European regulators have instituted similar bans.

But on Thursday the Authorite des Marches Financiers eased the ban, saying it would allow traders to roll over - or extend - their short positions when they expired. It will continue to bar them from taking on new ones. It had been unclear before whether traders could roll over positions they’d held before the ban went into effect.

Several countries banned short selling during the financial crisis of 2008 to try to tame volatility. But some experts argued that the bans actually contributed to a feeling of uncertainty since their very existence suggests the system isn’t working as it should and limits how traders can respond.

One moderately bright spot for European policymaker remains the relative calm in the bond markets after the European Central Bank started buying up Italian and Spanish bonds. Both countries’ yields on their ten-year bonds have fallen over a percentage point to below 5 percent, which is considered manageable.

There’s also been some calm in the currency markets, with the euro up 0.7 percent at $1.44 and the dollar down 0.2 percent at 76.47 yen. Earlier, Asian shares also took a beating following the big retreat Thursday in Europe and the U.S.

Japan’s Nikkei 225 index dropped 2.5 percent to 8,719.24 and Hong Kong’s Hang Seng slid 3.1 percent to 19,399.92.

Mainland Chinese shares tracked losses elsewhere, with shares in coal, oil and cement leading the decline. The Shanghai Composite Index lost 1 percent to 2,534.36 after dipping almost 2 percent earlier in the day. The Shenzhen Composite Index lost 0.8 percent to 1,133.84.

Oil prices continued recovered as the selling pressure in stock markets eased. Benchmark oil for September delivery was up 26 cents at $82.64 a barrel in electronic trading on the New York Mercantile Exchange. Crude fell $5.20, or 5.9 percent as equities tanked.
 

Date created : 2011-08-19

  • FINANCIAL CRISIS

    Asian stocks tumble after world recession warnings

    Read more

  • EUROZONE

    Sarkozy and Merkel fail to impress at crisis summit

    Read more

  • USA

    US probes Standard & Poor’s over mortgages

    Read more

COMMENT(S)