Shares sell-off amid fears over recovery and Greek downgrade

World stock markets suffered widespread losses on Thursday, tracking Wall Street lower amid growing fears that the recovery of the world’s largest economy is faltering . In Japan, the Nikkei tumbled 1.7% to 9,555.04 with exporters leading the losers. Confidence was also knocked in Tokyo by the “no confidence” vote in the embattled Japanese prime minister Naoto Kan over his handling of the earthquake and nuclear crisis at the Fukushima plant. There were heavy declines throughout Asian markets overnight and in London dealers are predicting losses of around 60 points for the FTSE 100 index when it opens at 8am BST. On Wednesday, the FTSE closed 61.38 points lower at 5928.61 but that was before the worst of the sell-off on Wall Street, triggered by grim economic news on manufacturing and jobs. “I think right now there’s almost a market consensus of the slowing down of economic growth around the world,” said Linus Yip, a strategist at First Shanghai Securities in Hong Kong told Associated Press. The US market suffered its worst day since August on Wednesday, tumbling more than 2%, or 280 points, to 12,290.14.The sell-off followed a gloomy report from US factories and worse-than-expected US jobs data, with the private sector adding just 38,000 jobs in May against market expectations of 175,000. Weaker than expected manufacturing data from Europe and China added to the gloom, as did a downgrading of Greece’s sovereign debt to “junk” status by Moody’s, which now says it believes there is a 50:50 chance that Greece will default on its debts. The ratings agency has cut Greece to Caa1 from B1, putting it on a par with Cuba, saying there was “at least an even chance of default over the rating horizon.” “Over five-year investment horizons, around 50% of Caa1-rated sovereigns, non-financial corporate and financial institutions have consistently met their debt-service requirements. Around 50% have defaulted,” Moody’s said. Oil prices were also in reverse, with WTI falling back through the $100 a barrel level, at $99.44 and Brent crude down 70 cents at $113.84. Markets are expected to remain volatile ahead of more key economic data from across the Atlantic on Friday – non-farm payrolls. Economists have slashed their forecasts following the grim private sector jobs numbers, with many now expecting an increase of 150,000 jobs rather than 180,000. Stock markets Global economy US economy Ratings agencies European debt crisis Fiona Walsh guardian.co.uk

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