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London: European markets slumped in early trade on Wednesday, with recession fears resurfacing after impressive gains in the last two sessions after steps taken by governments to bolster the struggling banking sector.
The FTSEurofirst 300 index was down 1.4 per cent at 952.72 points. It rose by a record 10 per cent on Monday and by 3 per cent on Tuesday.
On Wednesday, banks were the top weighted losers, with Standard Chartered falling 3.5 per cent, Societe Generale shedding 1.9 per cent, HSBC down 2.7 per cent and BNP Paribas dropping 2 per cent.
“After the colossal gains achieved at the start of this week, it would seem that the hangover has kicked in and investors have sobered to the reality that recession is here,” said Andrew Turnbull, senior sales manager at ODL Securities.
Recession fears returned to centre stage after trillions of dollars pledged for bank bailouts from Europe to Asia helped allay fears of an imminent financial meltdown.
Southeast Asian nations backed by Japan, South Korea, China and the World Bank were the latest to join the global rescue effort, agreeing to create a multi-billion fund to buy bad debt and help banks.
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