Shares run out of steam as recession fears resurfaceOctober 15th, 2008 - 4:40 pm ICT by IANS
Frankfurt, Oct 15 (DPA) A downbeat end to share trading in Wall Street and across Asia resulted in a weak start to stocks in Europe Wednesday as recession fears resurfaced.After beginning the trading day down 0.7 percent, Europe’s blue-chip Stoxx50 continued the downward momentum falling by 2.1 percent to 2358 points by mid morning.
Indeed, shares pulled back across national European bourses with stocks falling by 2.10 per cent in Frankfurt and by 1.84 percent in Paris.
Europe’s premiere stock market in London had lost more than 2.0 percent in mid-morning trading as an element of reality took hold among investors about the prospects of a global economic slump hitting corporate earnings.
While Tokyo managed to close 1.09 percent, other Asian share markets ended the trading day in negative territory with Hong Kong sinking by more than 5.0 percent. New York’s Dow Jones index ended Tuesday down by 0.82 percent after giving up earlier gains.
Wednesday’s weak share trading snapped two days of big gains in shares after investors reacted positively to the coordinated crisis management plans launched by governments around the world and central bank moves to pump liquidity into markets.
Signs have emerged of a thawing in frozen global credit markets, which began to tighten 15 months ago following the US subprime mortgage market crisis. This has been characterized by banks refusing to lend each other.
London’s key three-month libor rate narrowed to 4.64 percent Wednesday from 4.75 percent Monday.
However, analysts cautioned that it could take months before credit markets are successfully freed up and lending starts to flow more easily.
In the meantime, as a sign of the renewed recession fears, oil prices dipped below $78 Wednesday after days of volatile trading.