World share markets are ending another turbulent
trading week with stocks in Europe clawing back some of the steep
losses run up in action earlier during Friday's trading session.
Taking the lead from a marginally more assured Wall Street, Europe's benchmark Eurostoxx 600 share index closed down 1.41 percent at 223.51 points after slumping by 2 percent during the late morning.
Having opened off about 1 percent, New York's Dow Jones Industrial Average had lost 0.3 percent to trade below 11,000 points as the European trading day came to an end.
The faltering performance of world share markets came amid renewed fears about the global growth outlook and the risks to the financial sector caused by the debt crisis gripping parts of the 17-member eurozone.
Traders say markets have been driven by a crisis of confidence in policymakers on both sides of the Atlantic in the wake of worries whether they will be able to address the growth and debt problems facing the world economy.
Analysts are warning that investors could face more turmoil in the weeks ahead.
"Signs that European policymakers remain unwilling to take major steps towards fiscal union, coupled with very weak economic data and a renewed slump in equity prices, did nothing to alter our view that the debt crisis is set to intensify," wrote the research group Capital Economics in a note to clients.
Already the result has been to trigger a round of share market volatility not seen since the 2008 economic crisis and a flight to safe-haven investments such as gold, which has been hitting a record high almost daily.
The price of gold also pulled back from earlier big gains to trade up 1.4 percent at $1,850 an ounce in late European trading.
While Europe's premier exchange in London ended the week down about 1 percent, stocks in Paris, Frankfurt and Zurich slumped about 2 per cent.
Leading the European market falls on Friday was another steep drop in Frankfurt's prime DAX index, which tumbled by 3.3 percent in morning trading before recouping losses as the trading session unfolded.
Friday's declines were off the back of even more dramatic falls on Thursday. The DAX's 5.82 percent plunge on Thursday translated to the index's worst single-day loss since November 2008.
Traders said bargain-hunters and moves by options traders to close positions had helped to spur a modest rally at the start of the week.
But as the trading week unfolded and more downbeat economic numbers emerged from both the U.S. and Europe the rally seemed to quickly run out of steam.
This also helped to unnerve investors in Asia. Japanese shares fell 2.5 per cent Friday to the lowest level in five months on the back of concerns about the impact on the nation's exporters of the yen.
The Japanese currency finished the week by soaring to its highest level against the dollar since the Second World War.
At the same time Shanghai's composite index lost 2 percent, while shares in Singapore shares dropped 3.23 per cent. Indian markets shed 2.4 percent.
The biggest fall, however, was in South Korea where worries about the nation's leading exporters prompted a 6.2 percent plunge in the benchmark Kospi index.
After declining by more than 2 percent earlier in the day on concerns that lower growth could hit demand for energy, the oil price also bounced up 0.7 percent to $83.05 a barrel in late European trading.
The signs of a more measured mood prevailing on bourses also spilled over into the currency markets with the euro once again breaching the $1.44 mark after gaining 0.6 percent.
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