BBC: (World) Shares fall sharply on economy fears

[jannyk]

World stock markets have dropped sharply after a series of grim warnings over prospects for the global economy. Christine Lagarde, head of the International Monetary Fund, said the economic situation was entering a "dangerous place". Earlier, the president of the World Bank, Robert Zoellick, said the world's economy was "in a danger zone". The comments came after the Federal Reserve warned that the US economy faced "significant downside risks".

In Europe, the UK FTSE 100 closed down 4.7%, while France's Cac 40 fell 5.25% and Germany's Dax ended 5% lower. In the US, the Dow Jones was 4.3% in afternoon trading. The FTSE 100's tumble was its biggest one-day fall since the index fell 5.3% on 2 March 2009. Oil prices also fell sharply on worries that a global slowdown will hit demand. Brent crude for delivery in November tumbled $4.71 to $105.65 a barrel. West Texas crude dived $5.22 to $80.70 a barrel.

Mrs Lagarde told a news conference at the IMF's annual meeting in the US that the "path to recovery is narrower that three years ago," when developed economies sank into recession. She said that international leaders must act quickly on fiscal consolidation, the repair of household debt, and reforms of the public sectors. "Time is of the essence," she said.

On Wednesday, the US Federal Reserve had warned: "Recent indicators point to continuing weakness in overall labour market conditions, and the unemployment rate remains elevated. "There are significant downside risks to the economic outlook, including strains in global financial markets."

More at link: http://www.bbc.co.uk/news/business-15014843

Edited to add: CANADA STOCKS-TSX drops 4 pct on global recession fears
http://www.reuters.com/article/2011/09/22/markets-canada-stocks-idUSS1E78L1LQ20110922

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