Global Markets Tumble Amid Economic Fears

Markets around the world have tumbled as fresh fears over the eurozone and US debt grip investors.merica’s Dow Jones index closed down more than 4%, while the Asian markets also suffered massive losses on Friday.

Japan’s Nikkei 225 index lost 3.4%, South Korea 4.2%, and Australia tumbled 2.4%.Almost £50bn was wiped off the value of the FTSE on Thursday, with the listing for the UK’s top 100 companies closing at 5393, down 191 points or 3.43%, taking £49.8bn from its value.It is the biggest fall on the FTSE for more than two years.Since last Friday morning, £124.97bn, or 8.17%, has been wiped off the value of the FTSE 100.

Big fallers included satellite communications firm Inmarsat – collapsing 19.31% despite record profits, Lloyds Banking Group down 10.19% and mining group Vedanta’s 9.39% decline.Meanwhile, the New York Stock Exchange closed the Dow Jones industrial average down 4.31% – its worst day since the 2008 financial crisis. The broader S&P 500 was off 4.8% and the tech-based Nasdaq composite 5.08% lower.”We are now in correction mode,” Standard & Poor chief investment strategist Sam Stovall said.”We could have another couple of weeks to go before it bottoms.”The Cac40 in France closed almost 4% down, Germany’s Dax fell 3.4% and Italy’s main index was down more than 5.1%.Gold climbed before dropping nearly 1% – a swing of around $43 in New York, as investors seek out new safe havens.

“Even gold is susceptible. People are pretty much getting out of everything, except cash and bonds,” Kingsview Financial head trader and strategist Matt Zeman said.The meltdown came after EU president Jose Manuel Barroso wrote a letter to member states.He said: “Whatever the factors behind the lack of success, it is clear that we are no longer managing a crisis just in the euro area periphery.”He called for a re-assessment of all elements of the eurozone’s current and future bailout funds.

And he told them the eurozone needs to convince markets that it can respond to the debt crisis.There are concerns about the Spanish and Italian economies.Speaking on Sky News, the chief executive of the Centre for Economics and Business Research (CEBR) Doug McWilliams said: “(Italian Prime Minister Silvio) Berlusconi hasn’t solved the problem of the Italian economy, which has now become uncompetitive with the Euro.”

Greece has already been bailed out twice by the eurozone countries and Ireland has also required extra money to help rescue its precarious financial situation.The CEBR said that, with Italy’s economy being twice as big as Greece, Portugal and the Ireland combined, a bailout may be unaffordable for the eurozone.Sky business reporter Tadhg Enright said investors are concerned about the dwindling global economic recovery: “We saw earlier this week crisis just barely averted when a looming default by the US government on its debt was averted.”But that shone a spotlight on the state of its economy, growth in the second quarter of the year was far less than expectations.” – Skynews