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| Global stock markets in steep falls after Fed comments | Global stock markets in steep falls after Fed comments |
| (35 minutes later) | |
| European stock markets have fallen sharply after the US central bank signalled it could begin to scale back its economic stimulus programme later this year. | European stock markets have fallen sharply after the US central bank signalled it could begin to scale back its economic stimulus programme later this year. |
| In late morning trade, the UK's FTSE 100 index, Germany's Dax and France's Cac 40 index were all down 2.4%. | In late morning trade, the UK's FTSE 100 index, Germany's Dax and France's Cac 40 index were all down 2.4%. |
| Earlier in Asia, Tokyo's Nikkei 225 had finished 1.7% lower while the Shanghai SSE index fell 2.77%. | |
| Markets were also hit by weak Chinese manufacturing data. | |
| On Wednesday, Federal Reserve chairman Ben Bernanke said that if the central bank's forecasts were correct, it could begin slowing down asset purchases by the end of 2013 and wind them down completely by the middle of 2014. | |
| The Fed has been buying in bonds at a rate of $85bn (£54bn) a month, but believes it may be able to scale back as the US economy recovers. | |
| However, he emphasised that the programme was tied to how well the US economy was doing. | However, he emphasised that the programme was tied to how well the US economy was doing. |
| Speculation | |
| His comments spooked the US markets, with the Dow Jones Industrial Average falling more than 200 points, or 1%, to 15,112.19. | His comments spooked the US markets, with the Dow Jones Industrial Average falling more than 200 points, or 1%, to 15,112.19. |
| The S&P 500 closed 1.4% lower at 1,628.93, while the Nasdaq lost 1.12% to finish at 3,443.2. | The S&P 500 closed 1.4% lower at 1,628.93, while the Nasdaq lost 1.12% to finish at 3,443.2. |
| Gold prices also suffered on Thursday, falling to two-and-a-half year lows, largely thanks to a strengthening dollar, as investors speculated that US interest rates would have to rise. | Gold prices also suffered on Thursday, falling to two-and-a-half year lows, largely thanks to a strengthening dollar, as investors speculated that US interest rates would have to rise. |
| Up to now the Fed has been keeping interest rates at a record low range of between zero and 0.25%. | |
| The dollar rose by 0.76% against the euro and was up 1.39% against the yen. | The dollar rose by 0.76% against the euro and was up 1.39% against the yen. |
| Bond markets were also affected as investors began a widespread sell-off, sensing an end to the era of central bank stimulus measures. | |
| Yields on German ten-year bond yields rose 11 basis points to 1.67%, and two-year yields rose to 0.23%. | |
| Elsewhere in Europe, Italian 10-year bond yields rose 25 basis points to 4.51%, while Spanish equivalents were up 30 basis points to 4.83%. |