November’s markets ruled by recession fears, says S&P

The continued “rollercoaster ride” in the global economy caused the vast majority of Standard & Poor’s (S&P) indices to fall last month, according to the latest figures.

However, the agency’s latest World By Numbers report shows yesterday’s coordinated move by six central banks to boost liquidity to the global financial system caused a significant last-minute improvement in the markets.

The S&P Global Broad Market Index (BMI), which covers stockmarkets in developed and emerging countries, dropped by 3.29% in November – which amounts to losses of $1.1 trillion (£700 billion).

This fall follows the strong gain reported in October, which was the second best month in the BMI’s history. Some 45 of 46 S&P indices fell during November, with Denmark’s being the only one to see a rise.

Howard Silverblatt, a senior index analyst at S&P Indices, says: “The month was dominated by two overriding negative issues: US and European debt and the slowing growth of European nations.”

Silverblatt adds that yesterday’s announcement by the US Federal Reserve, the Bank of England and four other major central banks had an immediate positive effect on the indices. The BMI’s fall stood at 6.73% at the start of November 30 but this eased after the banks’ move was unveiled.

But the report adds that investors are still concerned by the health of the global economy, warning: “While a [European] slowdown was expected, there is now a growing concern that it could turn into a recession, which could trigger a global recession.”

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