03-03-2008
US recession fears hits shares
News by Adfero for Simply Business - independent providers of public liability insurance, business finance, landlord insurance, buy-to-let mortgages & commercial mortgages.
Shares in Europe and Asia have been affected by new fears that the US is entering into a recession.
According to reports, the UK's FTSE 100 index dropped during early trading today (March 3rd), with shares declining by close to 100 points.
By 10:00 GMT, FTSE 100 stocks had fallen by 72 points.
"The medium term is very difficult to predict as there are a lot of unanswered questions around banks' balance sheets," said Thierry Lacraz, a strategist at Pictet, a bank based in Switzerland.
"Estimates show a lot of shareholder equity is having to be written down, which will make banks shy to lend this year, and we will also have more dilution from capital increases."
In Japan, shares in the country's Nikkei stock index finished the day's trading 4.5 per cent lower at 12,992.18.
The fall in Japan is partially a consequence of the current value of the US dollar.