Markets recover after recession fears sparked sell-off

London Stock Exchange entranceImage copyright Getty Images

Markets in Europe stabilised on Thursday following a turbulent day on US and Asian stock exchanges, fuelled by investor fear of a global recession.

The FTSE 250, seen as a good gauge of the UK economy, gained 0.3% recovering some of the losses it made the pervious day, when it closed down 1.5%

The slight recovery followed a global sell-off amid concerns over the US-China trade war and the global economy.

Weak data from Germany and grim signs in bond markets spooked investors.

As a result, the three main US stock markets closed 3% lower overnight and European stocks fell across the board, while the Nikkei closed 1.2% lower.

But the picture was different on Thursday. Most European markets recovered some of Wednesday's losses, trading up about 0.3%.

But analyst Neil Wilson from said the recovery looked "precarious".

"Global risks and macro-economic data show no signs of improving," he said.

Wednesday's retreat by investors was triggered by tremors in bond markets, which were interpreted as a warning sign of a possible recessions in major economies.

But speaking to the BBC's Today programme, Kathleen Brooks from Minerva Analysis said the sell-off may have had a simpler cause.

"It's also August," she said. "People are away, so moves can be exaggerated in August."

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