A US trader checks a screen in a booth on the floor of the New York Stock Exchange on June 20, 2013.
Global markets have plunged following the announcement by the US Federal Reserve that it may begin to cut back on its stimulus of the US economy later this year.
On Thursday, the markets across the globe faced steep losses a day after Federal Reserve Chairman Ben Bernanke said that the Å“quantitative easing” program might be slowed down by the end of 2013, and completely stopped by the middle of 2014.
On Wall Street, the Dow Jones Industrial Average dropped 354 points and hit a low of 14,758, while The S&P 500 Index experienced one of its worst days sinking 2.5 percent to 1,588.19.
In Europe, Euro STOXX 50 index sank 3.6 percent, Germany’s Dax lost 3.3 percent, the CAC 40 fell 3.7 percent and in London, the FTSE 100 index dropped 3.0 percent.
The Asian markets were also hit by worries over China’s economic slowdown and the possible end to the US Federal Reserve’s stimulus. Shanghai’s market dropped 2.8 percent, Hong Kong fell 2.9 percent, and Tokyo’s Nikkei 225 index lost 1.7 percent.
The Å“quantitative easing” program, initiated to inject more cash into the economy, lifted both the US economy and world financial markets by keeping interest rates to maximum 0.25 percent. The end of the program means employing the policy of interest rates as the Federal Reserve’s controlling tool for its monetary policy.
IA/MHB
This article originally appeared on: Press TV