Growth fears hit Europe stocks and oil, gold recovers
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European shares dropped sharply on Wednesday as investors switched to stronger markets in the United States and Asia, where economic growth prospects are brighter due to massive central bank stimulus.
Expectations of further support from the U.S. Federal Reserve and the Bank of Japan amid signs of weak inflation also helped gold to recover from its lowest level in over two years hit on Tuesday after three days of heavy selling.
"Fund managers in Europe are switching guns because they are seeing on the one side Japan with positive momentum and Europe just getting deeper and deeper into a recessionary environment," Didier Duret, chief investment officer at ABN Amro.
Concerns have risen since the International Monetary Fund trimmed its forecasts for the world economy for this year and next on Tuesday, showing modest growth in the United States, expansion in Japan and weakness in Europe.
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