Global stock markets plunge as investors fear economic slowdown

Friday, 19 August 2011 10:22

Stock markets across Europe have started the day trading losses after Asian markets closed down overnight amid continued concern of a global economic slowdown.

By 10am this morning, the FTSE 100 was trading down by around two per cent, hovering just below the 5,000 mark. Germany’s Dax index fell by 206 points or 3.7 per cent to sit at 5,396 points and the French Cac index was down by 87 points, nearly three per cent at 2,989.

Markets in the United States also fell in yesterday’s trading, as did European stocks. The FTSE 100 has fallen by around 16 per cent so far in 2011.

Investors are concerned that despite interventions by the eurozone and high profile meetings between the German Chancellor, Angela Merkel and the French President, Nicolas Sarkozy, no new initiatives they have presented are appeasing the markets.

Meanwhile, in Asia, South Korea’s Kospi fell by 6.2 per cent; Australia’s S&P/ASX 200 index fell by 3.5 per cent and Japan’s Nikkei 225 dropped by 2.4 per cent at the close of trading this morning.

The fall in stock markets across many parts of the world has led investors to question if a bear market is set to stay for a prolonged period. A bear market is one in which the long-term trend is negative.

This morning, oil prices continued their fall as investors concern that global demand for oil will fall as economic growth slows.

The economic conditions mean that gold has once again reached a record high, with the spot price for an ounce reaching $1,833.81 an ounce.

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