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Financial markets saw further volatility yesterday as worries about the fragility of the banking sector and deepening gloom about the global economic outlook remained uppermost in investors' minds. q=BAYZ
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“Sentiment is increasingly showing facets of the November gloom as temporary gains are quickly erased,” said Ashraf Laidi, at CMC Markets. $/JnYkL{m
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“We had repeatedly warned late last year that rising risk aversion would return in the first quarter as the economic story joins the earnings story on the downside.” 6ozB U^n
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A strong opening rally on Wall Street stuttered, derailing a tentative recovery by European stocks and helping Treasury bonds pare early losses. The yen shot higher across the board as nervous investors sought the safety of the Japanese currency. ZcN%F)htm
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Conversely, sterling continued to suffer on the currency markets as the fallout from the bail-out package for UK banks announced at the start of the week continued to reverberate around the markets. l>>, ~
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The pound fell to a 23-year low against the dollar. It also touched a fresh record low against the yen and lost ground against the euro.
