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European shares resume decline Global shares drop for fourth day
(about 3 hours later)
European shares have been falling, marking the fourth day of losses, amid a wider trend of global volatility and investor jitters. Global shares have fallen for a fourth day, though the sharp slump that spooked markets at the start of the week seemed to be running out of steam.
The drop came after a short-lived climb in earlier trade. France's Cac-40 index and Germany's Dax both dropped 0.8% as the UK's FTSE 100 fell 0.22%. US markets slid, with the Dow Jones down 0.2%, after consumer confidence figures disappointed the market. The S&P and Nasdaq were little changed.
The trend compounds fears that recent falls indicate deeper economic problems and could even foreshadow a recession. Earlier in the day, European and Asian markets had declined, driven lower by concerns that prices were overvalued.
The global sell-off had started Tuesday, triggered by events in China. But, there have been signs of a rebound - with the UK's FTSE 100 inching ahead.
'Edgy' 'Very edgy'
Chinese shares fell 9% on the day, prompted by rumours of a crackdown on illegal share offerings and trading in the country. Analysts said stocks had been due a correction, adding that the question now was by how much and how long it would continue.
"Everyone remains very edgy. There is no sign of bargain hunting yet," one trader told Reuters. This week's sell-off was sparked by fears of a new tax in China on Tuesday, and then spread to broader global economic issues.
The Shanghai Composite Index, which had been behind the initial fall, actually closed 1.23% higher, but other Asian markets fared less well, including Japan's Nikkei index which ended 1.4% lower. Some market participants have raised the threat of a recession in the US, but many observers feel that this view is too extreme.
The FTSE 100, Europe's biggest stock market, has shed at least 5% over three days, wiping out more than £80bn ($156.3bn; 118.8bn euros) of its value. Instead, they are focusing on shorter-term issues such as currency fluctuations and inflation, and how they will impact on corporate earnings, experts said.
Just because China drops out of bed 9% doesn't mean we have to David Buik, Cantor Index "Everyone remains very edgy," one trader told Reuters.
Traders have been concerned that global economic growth could be threatened, in the wake of recent US economic figures showing the world's largest economy was slowing. The UK's FTSE added 0.1%, while in Germany the Dax index lost 0.6% and the French Cac 40 shed 0.6%.
Some analysts, however, say this does not necessarily mean there will a global fall. 'Irrational'
"Just because China drops out of bed 9% doesn't mean we have to," said David Buik of Cantor Index. Asian markets also gave a mixed picture. The Singapore Straits Times Index lost 0.6% while Australian shares fell 0.4%.
Investors will be watching closely to see how the markets open on Wall Street, after the benchmark US Dow Jones Industrial Average and S&P 500 indexes fell 0.3% and the Nasdaq declined 0.5% in the last session.
Data is expected at 1500 GMT on US consumer sentiment.
Many analysts say the US - as the world's largest economy - will be the most closely watched indicator of future trends.
Irrational
Asian markets gave a mixed picture. The Singapore Straits Times Index lost 0.6% and Australian shares fell 0.4%.
"The market has been performing a bit irrationally in recent sessions amid sharp fluctuations," said Chen Huiqin, an analyst at Huatai Securities."The market has been performing a bit irrationally in recent sessions amid sharp fluctuations," said Chen Huiqin, an analyst at Huatai Securities.
In Japan, Friday's closing losses on the Nikkei wiped out the last of the gains the index had made so far made this year.In Japan, Friday's closing losses on the Nikkei wiped out the last of the gains the index had made so far made this year.
But shares in Hong Kong traded higher, with the Hang Seng index rising 0.3%.But shares in Hong Kong traded higher, with the Hang Seng index rising 0.3%.