World Stocks Hurt by US Fed Tapering Comments

World stock markets fell sharply on Thursday and UK government borrowing costs hit a 15-month high after the chair of the Federal Reserve gave the clearest signal yet that America’s huge stimulus package will be slowed this year.

Fears that China’s economy was running out of steam were also blamed as the FTSE 100 hit its lowest level since January in London, amid heavy losses in European markets and in Asia overnight.

On Wall Street, shares picked up where they left off on Wednesday night with the Dow Jones index falling 200 points in early New York trading, adding to Wednesday’s 206-point decline as the global sell-off turned full circle.

Government sovereign debt also suffered losses, driving up the yield on Britain’s 10-year gilts to 2.29%, a level last seen in March 2012.

Commodity prices also joined in the rout, with the gold price falling below the $1,300 an ounce mark for the first time since September 2010.

Traders blamed the sell-off on Ben Bernanke’s prediction on Wednesday night that the Fed will start to ease its bond-buying programme later this year, having seen evidence that the US economy is recovering.

via The Guardian

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