Economy fears: Global shares drop further

Because of new concerns that the global economy faces an extended downturn, worldwide shares have fallen sharply.

In the US, Dow Jones index closed Tuesday 177 points or 2% down to 8,694 and it was mainly due to poor results overnight from Starbucks.

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Continuing fears over General Motors future also hit US investors confidence. Similarly, European and Asian shares also fell.

Oil prices, declining to 20-month lows, also kept falling.

On Tuesday trading, US light crude ended down $3.08 to $59.33 a barrel and it was the lowest price since March 2007. The demand of oil continued to fall due to slowing economy.

In UK, FTSE 100 share index closed 3.6% down and Japan’s Nikkei dropped 3%. Similarly, France’s Cac fell 4.8% and Germany’s Dax slid 5.3%

ECU Group chief economist, Neil Mackinnon says: “There is unremitting flow of bad news and now the markets are quite worried about the economic crisis.”

“The economic slump seemed to be longer and deeper and it’s a real concern for equity markets.”

After China’s announcement of a $586bn economic stimulus package, Asian and European stocks enjoyed rises on Monday, but that gains were short lived.

On the FTSE, Tuesday’s biggest fallers were those mining firms that gained on Monday after China’s package announcement.

Economy fears: Global shares drop further
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