Sept 22, 2011
The US Federal Reserve’s Operation Twist failed to bring calm to financial markets, which tumbled on Thursday as investors took fright at the US central bank’s gloomy warning about the economic outlook.
The FTSE 100 index in London plunged more than 210 points to 5078, a 4% drop, with not a single riser in sight. In Asia, markets also suffered heavy losses, with the Nikkei closing down 2.1%, Hong Kong’s Hang Seng tumbling 4.9% and the Jakarta stock market losing nearly 9%. On Wall Street, futures indicate the Dow Jones will open 160 points lower.
The sell-off came after the Fed unveiled a new $400bn bond-buying plan on Wednesday to ward off a double-dip recession. It emerged on the same day that the Bank of England was also getting ready to pump more money into the British economy.
The European Central Bank came under pressure to take action itself after a worsening in the services and manufacturing sectors sparked warnings that the economic recovery was definitely over. This was exacerbated by news that industrial orders in the eurozone slid for the second month in a row in July.
This article was posted: Thursday, September 22, 2011 at 2:39 am