January 27, 2014 08:14
World stock markets plunged Friday, as investors worried about a possible slowdown in emerging markets.
U.S. stock indexes dropped around 2 percent Friday, sinking for a second day. Markets in Paris and Frankfurt fell about 2.5 percent and Asian markets also mostly finished lower.
Analysts said investors were concerned about sharp drops in the value of currencies in several emerging economies, including Turkey, Russia, South Africa and Argentina, and a report Thursday that Chinese manufacturing is slowing.
In addition, some traders are worried about the withdrawal of global stimulus, especially in the United States, the world's largest economy. Policy makers at the country's central bank, the Federal Reserve, started to trim their direct support of the American economy this month and could reduce it further when they meet next week.
Some financial experts say the concern is that as the economic stimulus is cut in the most advanced economies, interest rates will rise in the U.S., Europe and Japan, and that investments there will then increase, to the detriment of emerging economies.
Some information for this report was provided by AP.
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