8 Nov 2012

Markets down amid new recession fears

5:09 pm on 8 November 2012

World share markets fell on Wednesday, as investors worried that the fiscal challenge facing Barack Obama after his re-election on Tuesday could lead to a new recession.

They were also weighed down by comments by European Central Bank president Mario Draghi who said the bank expects the euro zone economy to remain weak "in the near term" and that recent data suggests the German economy is being affected by the debt crisis in the eurozone.

The euro dropped to a two-month low of $US1.2749 on Tuesday.

The Dow Jones Index was down 258 points, or 1.95%, to 12,986. The Nasdaq Composite was down 67 points, or 2.3%, to 2944.

In Europe, the FTSE in London was down 1.58%, the DAX in Frankfurt was down 2.02% and the CAC-40 in Paris was down 1.96%.

The IBEX index in Madrid lost 2.26% as Spain's growth prospects grew darker.

Earlier, the Nikkei index in Tokyo slipped 2 points to 8,972 and the Hang Seng in Hong Kong gained 155 points to 22,099.

Brent crude oil was trading at $US109.06 per barrel and gold was trading at $US1711.56 per ounce.