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Markets fall on weak US jobs data | |
(about 2 hours later) | |
European markets have fallen sharply as weak US jobs data added to fears of a new global economic downturn. | |
Stocks immediately fell a further 1%, adding to losses earlier in the day, as the Department of Labor announced the US economy added no net jobs in August. | |
London's FTSE 100 was 2.3% down for the day and Frankfurt's Dax was 3.4% lower. | |
The jobs data follows manufacturing sector surveys released on Thursday which showed activity at factories worldwide dropped last month. | |
Meanwhile, new data from the UK on Friday also pointed to a further slowdown in the construction sector there. | Meanwhile, new data from the UK on Friday also pointed to a further slowdown in the construction sector there. |
Seeking havens | |
The sharp drop in stock markets following the Department of Labor's announcement in the early morning in New York added to a day-long sell-off. | |
The slump began in late trading in the US on Thursday, where the Dow Jones ended the day 1% lower, before continuing in Asia on Friday morning, where Tokyo's Nikkei fell 1.2%, and Hong Kong's Hang Seng 1.8%. | |
Banks were among the worst performers on Friday. | |
In the UK, Lloyds fell 4.7% and Barclays 5.6%, while on the continent Commerzbank was down 5%, Deutsche Bank 5.4% and Societe Generale 5.1%. | |
The latest falls follow a highly volatile August, with markets globally rocked by a slew of weak economic data from the US and Europe. | The latest falls follow a highly volatile August, with markets globally rocked by a slew of weak economic data from the US and Europe. |
There were also fears over the impact of government austerity programmes, and concern at the implications of the downgrade of some governments' credit ratings, including that of the US. | There were also fears over the impact of government austerity programmes, and concern at the implications of the downgrade of some governments' credit ratings, including that of the US. |
Haven investments rallied as investors sought safety from the downturn. | |
Gold rose 3% for the day to just below $1,880 a troy ounce, close to the all-time high of $1,913.50 set last month. | |
The euro fell 3% against the Swiss franc, briefly touching 1.10 francs after the US jobs data release. | |
The Swiss authorities have repeatedly intervened to weaken their currency after the euro dropped below the 1.05 francs level last month. | |
US government debt also rallied, with the yield - the implied cost of borrowing - of the 10-year Treasury bond falling instantly from 2.13% to 2.03%, in anticipation of a possible further round of debt purchases by the Federal Reserve. | |
The 10-year yield briefly dropped below 2% early in August, hitting its lowest level since World War II. | |
Have you been affected by the current economic crisis? Would you be willing to talk to the BBC? Send your comments and experiences using the form below. | Have you been affected by the current economic crisis? Would you be willing to talk to the BBC? Send your comments and experiences using the form below. |