European shares fall more than 5 percent by a new recession fears

Best Growth Stock – European stocks fell today by more than 5% in a day of strong fluctuations, which were placed sell orders after the lower open on Wall Street and talk of a downgrade of the debt of France.

Milan led the losses with a decline of 6.65%, Madrid fell 5.49%, Paris was down 5.45%, Frankfurt fell 5.13% and London did a 3.05%.

European stocks had recovered in the morning and rises occurred around 1%, buoyed by the decision of the Federal Reserve (Fed) to keep interest rates near zero for two years, but fell back sharply in the last hours of negotiation due to the widespread fear of a new recession.

Before the awakening of the European markets, the mood improved in Asian markets and on Wall Street (the day before) with the decision of the Fed

Tokyo’s Nikkei rose 1% after two days of heavy losses.

The general index of Shanghai Stock Exchange rose 0.91% and Hong Kong stock market gained 2.34%.

Again the day’s trading was volatile in Europe and in the market “cash is king” today, according to an operator.

An hour before the close of European securities markets, the Dow Jones industrial average was down 4% and dragged major indexes of the Old Continent.

The president of the U.S. Federal Reserve (Fed) Chairman Ben Bernanke has made clear it will print money, which was welcomed in the markets at first but after the recession scenario prevailed and the fear of a double dip , told EFE an operator of the Frankfurt market.

In addition, market rumors that a risk evaluation agency will lower the debt ratings of France, which dragged the index of European banks, which closed with a decline of 6.7%, while Insurers are allowed a 5%.

Little good it did the denial of the French Government, which said that the three credit risk measurement have confirmed their highest rating and believe that there is no risk of degradation of the debt of France, as markets often consider “where there is smoke, there is also fire “and react very aggressively.

Also, the market also circulated rumors that the French bank Societe Generale in difficulty and its stock price plummeted 20% to the minimum of the last two and a half years despite the denial.

Also, the euro was affected and fell to $ 1.4191 change, having grown to over $ 1.44 in the morning.

In the year to date European stock average losses accumulate over 20%.

The Euro Stoxx 50, which comprises the largest companies in the euro area fell by 22.9%.

18.8% yield Frankfurt, London loses 15.1%, Paris down 21.1%, 19.2% lower Madrid and Milan makes 27.3%.

The Athens Stock Exchange (Athen-20) led declines in Europe with a fall of 35.5%.

The ECB has bought sovereign of Spain and Italy for a third day, which has contributed to falling profitability and the risk premium on government bonds to ten years in these countries.

The profitability of Spanish bonds to ten years stood at 5% and the risk premium on 280.5 points (269.8 points the previous day). The interest of ten-year Italian bonds stood at 4.97% and the risk premium at 277 basis points (267.9 points the previous day).

In an environment of uncertainty and loss of confidence, investors sought safe assets such as the Bund (German bonds to ten years) whose yield fell to 2.20% and gold also broke records and was paid more than $ 1,786.