European stock markets have seen sharp falls as fears deepen over prospects for the global economy, BBC reported.
London’s FTSE 100 share index was down 1%. France’s Cac 40 index was also down 1% while Germany’s Dax fell 1.7%.
Poor economic data from Germany this week has stoked fears that the euro zone could be heading for another recession.
Oil prices also saw sharp falls, with the Brent crude price hitting its lowest level for nearly four years.
Brent dropped $1.65 to $88.40 a barrel at one point before recovering some ground to stand at $89.09.
US oil fell $1.92 a barrel to $83.85, its weakest level since June 2012, although it also regained some ground to stand at $84.29. Both oil benchmarks have lost about 20% since their peak in June.
Oil prices have been undermined by a combination of increasing supplies and weakening demand.
Libya has recently increased its supply of oil to the open market, and demand from China, the world’s second biggest user of oil, has slipped as its economic growth has slackened off.
German Downtrend
German economic data presented a consistently negative picture last week. Figures released on Thursday showed exports fell 5.8% in August, and this followed weak industrial output figures on Tuesday.
On Thursday, IMF chief Christine Lagarde, crystallized investors’ worries about flagging economic growth by warning the euro zone could return to recession.
The IMF cut its forecasts for global growth in 2014 and 2015 last week.
Its downgrade of prospects for the three biggest euro zone countries’ economies - Italy, France and Germany - prompted the Chancellor, George Osborne, to warn the UK economy was facing a “critical moment”.
Osborne said, “The euro zone risks slipping back into crisis. Britain cannot be immune from that. It’s already having an impact on our manufacturing and our exports.”
US stocks fell sharply on Thursday, with the Dow Jones recording its biggest one-day fall of the year, closing down almost 2 %. Wall Street stock futures’ losses accelerated after being down less markedly earlier Friday morning. S&P 500 and Nasdaq futures fell around 0.5%.
Asian markets fell sharply Friday and oil prices plunged on the heels of Wall Street’s dramatic decline in the prior session.
Japan’s Nikkei 225 index tanked 1.2% and Hong Kong’s Hang Seng index dropped 1.9%. China’s Shanghai Composite dropped 0.6%.
