Asian markets lead global fall after uncertainty over US monetary policy

Warnings of slower but more stable growth over the coming months

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The Independent Online

The FTSE 100 fell again this morning for a fourth day as uncertainty over US monetary policy left world markets in decline.

The Nikkei closed down 6.4 per cent last night, driven down by nagging concerns about a possible moderation of asset purchases by Washington’s Federal Reserve. The leading benchmark of Japanese shares is now 22 per cent below its peak in May. There was contagion across Asia as Chinese shares fell 3.3 per cent and Hong Kong’s Hang Seng slipped 2.2 per cent.

On the FTSE 100, RBS shares slipped 18.9p to 306.7p after news last night that chief executive Stephen Hester will leave this year giving investors cause for concern that no successor is in place. The overall index shed was down 1.07 per cent to 6232.33, its lowest level since January. The UK blue-chip index is now 9 per cent below its May peak.

There was heavy selling in Europe too, with the French CAC shedding 1.2 per cent and the German DAX falling by 1.94 per cent. Spain’s IBEX slipped by 1.1 per cent and Italy’s benchmark index was down 1.6 per cent. The FTSEurofirst 300 was 1.45 per cent lower, driven down by slides in commodity and banking stocks, meaning that it has now given up all its gains since April’s rally.

Traders have expressed worries that better economic data from the US economy will prompt the Washington central bank to “taper” its bond buying scheme, thus draining liquidity from global equity markets.