Markets down on Europe and US economy fears

Stock markets have fallen on fears about the European and US economies, reports the BBC.

Shares fell in Europe following the disappointing Spanish bond sale. French and German shares dropped by nearly three per cent. In addition, the European Central Bank said that it would not take emergency measures to tackle the debt crisis in the eurozone, adding to investor concerns.

In the US, Wall Street declined by one per cent after the Federal Reserve indicated that it may not be providing further stimulus. The FTSE 100 in the UK closed 2.5 per cent down.

In Europe, the government of Spain had hoped to sell as much as 3.5bn euros (£ 2.9bn) of medium-term bonds, but ended up only offloading 2.6bn euros. It again raised fears about high sovereign debt levels in a number of eurozone member states.

Lloyds Banking Group’s Achilleas Georgolopoulos described the Spanish bond sale as “very disappointing”. Market sentiment was weakened further by a survey which revealed that the eurozone services sector continues to weaken.

The price of oil along with other benchmark commodities also fell. Light sweet crude dropped by 2.4 per cent to $101.46 per barrel, while Brent crude went down by $2.17 to $122.69.