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article imageEconomic uncertainty sends stocks tumbling globally

By Simon Crompton     Jan 6, 2015 in Business
Stock markets around the world saw prices dropping heavily as the price of oil fell below $50 per barrel and worries about the economy of Greece, in particular, and Europe, as a whole, sent investors scrambling for an exit.
In London, the FTSE 100 index fell to 6417.16, a drop of 2 percent which equates to a loss of L33.2 billion from UK blue chip firms and a serious blow to investors and savers. Other stock markets fell, as well. Milan dropped 4.92 percent, Athens fell 5.63 percent and the New York stock exchange slumped by 1.9 percent, its largest drop since October.
“The market fears that the oil-price decline is telling us something bad that we don’t know about global growth,’’ said Eric Stein of Eaton Vance Management.
Oil prices fell below $50 per barrel for a brief period on Monday. This is the first time that crude oil prices have dropped this low since April 2009 and signifies that supply will be higher than demand for the upcoming months. This has created a flurry of speculation, creating more interest in binary options brokers list.
Increased production in the United States has been matched against slow growth in demand for oil, which has been the primary force behind the falling price in recent months. Although the slump in oil prices is good for the consumer, with lower prices at the pump, it has seen the value of oil companies’ fall.
This decline, matched against the political instability in Greece, has sent the value of the euro tumbling against the U.S. dollar, reaching a nine-year low on Monday. Adding to that, Greece is preparing for elections later this month and the Left-wing Syriza party was vowed to abandon the nation’s L188 billion bailout agreement. The Syriza party is leading in the polls and the fear is that Greece would leave the Eurozone.
“It would be a nasty precedent if Greece leaves as it could stimulate others to do the same, making it the first step of euro fragmentation,” said Carsten Brzeski, chief economist at ING. “The fact remains that losing one member of the family would ultimately open Pandora’s box.”
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