Stocks tumble worldwide amid recession fears

European stocks fell on Friday, following Asia’s earlier in the day and a worldwide decline Thursday, because of fears that the US economy will fail to recover. European shares suffered their biggest two-day slump since 2008 and oil dropped to 80 dollars a barrel, while gold reached a record high.

Reuters/Chris Helgren

Paris’s Cac 40 was down 2.99 per cent to 2984,07 points at midday, while in London the FTSE 100 fell 2.5 per cent to 4967, below the symbolic 5,000 mark.

Earlier Asian bourses took a tumble, with Mumbai down, 2.92 per cent, Tokyo down 2.51 per cent and Seoul slumping 6.22 per cent.

The new falls come after a week of relative calm. The volatility is attributed to both CitGroup and JP Morgan banks cutting their forecasts for US growth, triggering fears of a global recession.

In other economic news:

• France eased its ban on short-selling of banks;
• Spain’s cabinet agreed a new austerity package to be put to an emergency meeting of parliament, expected to be held next week;
• Greece’s GDP may fall 4.5 per cent this year, according to Finance Minister Evangelos Venizelos;
• Hong Kong arrested a 29-year-old man in relation to a cyber-attack on the stock exchange website that halted trading in shares of seven companies last week.