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Thursday 16th of October 2008
October 15, 2008

As banking turmoil calms, fears grow for worldwide recession


by Kay Murchie
”As

Many leading economies have now announced bailout packages for their banks but stock markets have lost ground as investors fears that the world is heading for a recession.

As the FTSE 100 opened in London this morning, it lost 77.8 points to 4316.5 with mining shares leading the falls. Meanwhile, the Dow Jones index closed down 0.8% at 9310 points last night.

In Wednesday trading, Asian stock markets have fallen after two days of sharp rises.

Japan’s main Nikkei index closed 14% up yesterday to 9,448 - the biggest daily rise in its history. However, it has eased 1.4% today. Figures showing a 20% increase in imports while exports slowed increased fears of recession in Japan’s economy, which depends heavily on exports.

Meanwhile, shares in India, Australia and Hong Kong also ended lower.

According to Patrick Shum, strategist with Karl Thomson Securities in Hong Kong, worldwide Governments are cutting welfare spending and issuing more debt to support the financial system. However, these measures will create a larger problem of an economic slowdown.

Yesterday, a leading economic think tank reported that Europe’s largest economy, Germany, is close to recession.

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