World Markets Trade Down For First Time Since Fed Cuts

By Stewart Douglas

World stock markets have seen their first day of all round negative trading after the Federal Reserve cut US interest rates to 4.75% earlier in the week, reflecting that the world economy may not yet be in to the clear.

The negative trading comes largely as a result of word from the Federal Reserve that the extent of the sub-prime lending crisis could be much more significant that earlier analyst projections, citing growing repossessions as indicative of the scale of the wider problem.

After two days of heavy gains, the Dow Jones exchange led the way for market sell offs over the course of trade today.  The Dow lost 55.69 points on close of trade yesterday thanks to the announcements from the Federal Reserve today, which saw the index close at 13759.9.  The NASDAQ exchange also echoed the losses on the Dow Jones, down 11.52 points to 2655.0.  The S&P 500 exchange also saw losses of 9.44 points on the day to 1519.6.

European markets also suffered losses as a result of the Federal Reserve’s bleak outlook on the extent of the sub-prime crisis, whilst the French markets specifically were down on the threat of industrial action and news of extreme jobs cuts within the private sector.

In Paris, the CAC 40 exchange was amongst the day’s biggest proportionate losers, down 42.06 points to close at 5688.8.  Meanwhile in Frankfurt, its German counterpart the DAX exchange saw losses of 15.75 points on the day to close at 7735.1.

In London, the FTSE 100 also saw losses after a few days of heavy gains, losing a round 31.00 points to take the index to 6429.0 by the closing bell.

Analysts are predicting timid trading over the course of early morning trade tomorrow, as analysts begin to weigh up the impact of the Federal Reserve’s actions over the last few days.