Markets Plummet After Bernanke Testimony
FED chairman Ben Bernanke told the US Congress on Wednesday that the US central bank might scale back its stimulus policies, throwing global markets into disarray.
Bernanke said that: “If we see continued improvement and we have confidence that that is going to be sustained, then in the next few meetings, we could take a step down in our pace of (bond) purchases. If we do that, it would not mean that we are automatically aiming towards a complete wind-down.”
The FTSE went down 2 per cent in early trading following reports that US may retract on quantitative easing coupled with poor data from China. The turmoil was echoed across European indices, startled by a seven per cent drop on Japan’s Nikkei index. London’s yardstick FTSE 100 index recoiled 1.74 per cent, Frankfurt’s DAX 30 fell 2.33 per cent and in Paris the CAC 40 decreased by 2.20 per cent. Madrid, Milan and Stock holm all saw signficiant losses in their respective stock markets.