Wednesday, 6 July, 2022

Stocks tumble as World Bank slashes global growth forecast

Stocks tumble as World Bank slashes global growth forecast

LONDON: Major stock markets fell Tuesday as investors fret over central bank actions against inflation and the World Bank cut its global economic growth forecast following Russia's invasion of Ukraine, reports AFP.

The World Bank slashed its growth estimate from 4.1 percent to 2.9 percent, warning that "recession will be hard to avoid" in many countries.

"The world economy is expected to experience its sharpest deceleration following an initial recovery from global recession in more than 80 years," the Washington-based institution said in its Global Economic Prospects report.

Craig Erlam, analyst at online trading platform OANDA, said the markets gave back the bulk of Monday's gains "in a sign of ongoing uncertainty as to the direction of equity markets and the economy".

Stock markets in London, Paris and Frankfurt, already in the red earlier, were dragged down further by a weak opening on Wall Street. analyst Fawad Razaqzada warned that markets would continue on their downward trend for some time to come as central banks wind down easy money policies in efforts to combat soaring inflation. "We are still in a bear market and with central banks ending (quantitative easing) and reducing their balance sheets, the good days of the stock markets may well be behind us," he said.