US, British and European share markets have posted sharp declines overnight, amid continued anxiety about the state of the global economy.
Traders work on the floor of the New York Stock Exchange Photo: AFP
The index of London's leading shares fell 2.4 percent, with the FTSE 100 closing down 124 points at 5,549 points.
Markets in Frankfurt and Paris were down 2.9 percent and 4.1 percent respectively, while Wall Street was also trading lower, with the Dow Jones falling almost 2 percent.
The NZX 50 Index was down 0.54 percent yesterday and has dropped more than 5 percent since the start of the year.
The chief economic adviser for Centre for Economics and Business Research in London, Vicky Price, told Morning Report the world was slowing down a lot faster than anyone had expected.
She said banks were now exposed following commodity and oil price declines and the situation could get worse.
Analysts said US Federal Reserve chair Janet Yellen's gloomy economic assessment on Wednesday had added to investors' worries.
In testimony to Congress, she said that financial conditions in the US had become "less supportive" of growth and warned of the "increased volatility" in global financial markets.
Rabobank European strategist Emile Cardon said the worst could still lie ahead: "The bad news in now coming from everywhere - China, Portugal, the US, the commodity sector, the banking sector. It's like several smaller crises could combine into one big crisis."
On the FTSE 100, the biggest losers were a mix of financial firms and mining stocks.
Barclays was the worst-performing bank, sliding 6.4 percent. Its shares have fallen by almost a third since the start of this year, leaving it worth £25bn.
That is about the same value as Royal Bank of Scotland, whose shares have fallen more than a quarter this year.
In Frankfurt, Deutsche Bank was down 6.1 percent, as its share price continued to suffer from concerns about the strength of its balance sheet.
Banks are under pressure across Europe because of fears that exposure to bad loans may leave them ill-prepared to cope if the global slowdown intensifies.
US banks such as Citigroup and JP Morgan also fell on Thursday, with declines of 5.9 percent and 4 percent respectively.
- BBC / RNZ
