European financial markets have fallen sharply on fears that central banks will start tapering their emergency Covid-19 support packages, despite slowing growth in the world economy.
In London, the FTSE 100 fell by 2.3% in morning trading on Thursday, before recovering some ground to close 1.5% downat 7,058, as share prices tumbled across the continent after the US Federal Reserve said it could start cutting back support for the world’s largest economy this year.
In Paris, the French stock market tumbled by more than 2%, while shares fell in Germany, Italy and Spain by more than 1%.
Share prices on Wall Street were flat in early afternoon trading on Thursday in New York, steadying after the S&P 500 index fell more than 1% on Wednesday after the Fed’s intervention.
Fed officials signalled on Wednesday that the threshold for the US central bank reining in its quantitative easing (QE) bond-buying programme could be breached in the…