Recession fears continue to hit stock markets

The European and Asian stock markets have been affected by the heightened fear that the long and protracted fall in the global economy will continue, which has caused the Dow Jones to fall to its lowest level in 5 years.

Shares in London have also been hit again today, due to the fact that investors have taken a hit in Japan and America, with the FTSE ending down 202.87 points yesterday.

The drop was led by mining shares which were the hardest hit with Arcelor-Mittal losing 8 percent and Vedanta Resources losing closer to 9 percent.

Japan’s shock report on the fall of exports has driven the Nikkei 225 Stock Average down 4.1 percent, whilst yesterday the Dow Jones index fell 5 percent to below 8,000, following the report released by the US Federal Reserve which cut economic growth forecasts even further.

The slowdown is experiencing a cyclical effect as the negative news from across the Atlantic has caused jitters in the euro zone and in Japan, as major firms such as Toyota and Nintendo depend on US consumers for a high proportion of their sales.

It seems as though the knock-on effect from the major economies has hit trade-dependent nations and the stark reality is that the emerging economies are simply not in a position to take over, as their own exports are struggling in a difficult market and their economic growth rates are no longer in double figures for the first time in decades.

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