Global stocks down on euro zone and recession fears
Global stocks have fallen to a one-week low today with banks among the worst performers.
Concerns that the euro zone may not be able to contain its debt crisis, together with fears of the US slipping back into recession sent European shares falling this morning.
Deutsche Bank lost 7.3% in early trading today, Societe Generale was 7.1% lower, Barclays was down 7.4%, while Royal Bank of Scotland lost more than 8%.
Asian markets also ended the day lower, with Tokyo’s Nikkei down 1.9% and Hong Kong’s Hang Seng losing 3%.
Figures released last week showed weaker than expected US jobs data; according to the Labor Department, the world’s largest economy added no new jobs last month, which was a surprise after markets had expected 70,000 new jobs.
This represented the first time since 1945 that there has been a zero payrolls figure after 17,000 jobs were added in the private sector last month but these were cancelled out by 17,000 jobs lost in the public sector.
Meanwhile, there has been a further rise in borrowing costs for Spain and Italy – regarded by many as the next countries to be forced to seek an emergency bailout.
Italy’s 10-year borrowing cost hit 5.4% in early Monday trading, up from 4.9% in mid-August.
Greece and Ireland’s borrowing costs surged prior to them being forced to seek emergency aid so fears are growing for these two countries.
Many are concerned about the high debt levels of euro zone countries, and how these could affect the wider economy.
Concerns also sent oil prices down with US light crude falling $1.50 a barrel to $84.95.
Brent crude was also down, dipping $1.80 to $110.53 per barrel.
According to one analyst, oil is falling on concerns over weak demand, unemployment and fears that a double dip recession is looming.
Finally, the euro also lost ground against the US dollar, losing 0.4% to $1.4143 – the weakest level for almost four weeks.