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| Global markets continue to fall | |
| (10 minutes later) | |
| UK shares have fallen sharply in early Friday trading on the back of a sell-off in global stock markets. | UK shares have fallen sharply in early Friday trading on the back of a sell-off in global stock markets. |
| The FTSE 100 lost 41 points, or 0.66%, in early trading on the back of Thursday's 3.2% slump - the biggest percentage loss in three years. | |
| Concerns about the impact of higher global interest rates on company profits, takeovers and loan defaults has hit world markets. | Concerns about the impact of higher global interest rates on company profits, takeovers and loan defaults has hit world markets. |
| Asian shares ended more than 2% lower, after similar losses on Wall Street. | |
| Worrying conditions | Worrying conditions |
| The FTSE 100 was trading down 41.1 points, at 6,210.1 by 0820 BST. | |
| Analysts had predicted a further dip when UK trading resumed, but said that because most of the year's gains had been wiped out in one day, the market was now undervalued. | Analysts had predicted a further dip when UK trading resumed, but said that because most of the year's gains had been wiped out in one day, the market was now undervalued. |
| Germany's Dax index opened 1.6% lower while France's Cac-40 lost 0.54%. | |
| Japan's Nikkei average closed 2.4% down, lost 418.28 points, or 2.4%, to end the week on 17,283.81. | Japan's Nikkei average closed 2.4% down, lost 418.28 points, or 2.4%, to end the week on 17,283.81. |
| Hong Kong's index was trading 2% lower while Chinese shares were also in negative territory. | |
| It followed New York's Dow Jones Industrial Average losing 311.5 points, or 2.3%, to 13,473.57, while the S&P 500 shed 2.3% to 1,482.66. | It followed New York's Dow Jones Industrial Average losing 311.5 points, or 2.3%, to 13,473.57, while the S&P 500 shed 2.3% to 1,482.66. |
| Asian investors had used Wall Street's decline as an excuse to lock in profits said Kitty Chan, director at Celestial Asia Securities. | Asian investors had used Wall Street's decline as an excuse to lock in profits said Kitty Chan, director at Celestial Asia Securities. |
| Worries that have been out there for the past couple of years are coming to a head right now Edward YardeniPresident, Yardeni Research | Worries that have been out there for the past couple of years are coming to a head right now Edward YardeniPresident, Yardeni Research |
| "After all, markets worldwide have gained considerably in recent months," she said. | "After all, markets worldwide have gained considerably in recent months," she said. |
| Analysts and investors have been warning that a number of factors are combining to create worrying conditions for equity and credit markets. | Analysts and investors have been warning that a number of factors are combining to create worrying conditions for equity and credit markets. |
| "Worries that have been out there for the past couple of years are coming to a head right now," said Edward Yardeni, president of Yardeni Research. | "Worries that have been out there for the past couple of years are coming to a head right now," said Edward Yardeni, president of Yardeni Research. |
| Over the past few years there has been a boom in company profits, house prices and mergers and acquisitions. | Over the past few years there has been a boom in company profits, house prices and mergers and acquisitions. |
| Driving this have been low interest rates that have made it cheap for companies and consumers to borrow cash and finance purchases. | Driving this have been low interest rates that have made it cheap for companies and consumers to borrow cash and finance purchases. |
| That period of cheap cash now seems to been coming to an end with central banks worldwide, including the Bank of England, raising their rates to slow stubbornly high inflation. | That period of cheap cash now seems to been coming to an end with central banks worldwide, including the Bank of England, raising their rates to slow stubbornly high inflation. |
| At the same time, oil prices have climbed, raising fears that inflation could also pick up again because of higher energy costs. | At the same time, oil prices have climbed, raising fears that inflation could also pick up again because of higher energy costs. |
| 'Appreciating risk' | 'Appreciating risk' |
| Markets are in "risk reduction mode", said Thomas di Galoma of Jefferies & Co. | Markets are in "risk reduction mode", said Thomas di Galoma of Jefferies & Co. |
| As stock prices tumbled bonds rallied, with investors looking for assets that could guarantee them steady, and relatively safe returns. | As stock prices tumbled bonds rallied, with investors looking for assets that could guarantee them steady, and relatively safe returns. |
| "You have a classic flight-to-quality rally," said Dean Junkans of Wells Fargo Private Bank, adding that markets outside of bonds were "finally appreciating risk". | "You have a classic flight-to-quality rally," said Dean Junkans of Wells Fargo Private Bank, adding that markets outside of bonds were "finally appreciating risk". |
| Bill Schultz of McQueen, Ball & Associates said: "A lot of people are moving out of stocks, out of riskier fixed income into short-term Treasuries." | Bill Schultz of McQueen, Ball & Associates said: "A lot of people are moving out of stocks, out of riskier fixed income into short-term Treasuries." |
| "If the stock market recovers, you will see the rally pull back." | "If the stock market recovers, you will see the rally pull back." |