Chinese exports slow in may as world demand has hesitated. This came a drop on the part of British industrial production in April and recent reports from United States showing an anemic recovery.
The price of oil was also fell after Saudi Arabia began to offer more oil to Asian refiners, with Brent crude in London down a $1.25 to $118.32 in afternoon trading.
"The world economy embarked on a"soft patch"and this is particularly the case for developed countries, but no one knows what the magnitude and duration will be," said Herve Goulletquer, analyst at Credit Agricole.
The uncertainty caused stock market sentiment to turn sour. In Europe, the FTSE 100 closed down 1. 5pc to 5,765, while the Germany DAX fell 1. 2pc and the CAC 40 in France fell by 1. 9pc.
In the United States, the Dow Jones industrial average fell 1. 1pc to 11,984, while the broader S & P 500 index fell 1. 2pc and the Nasdag slid 1. 2pc.
In the currencies market, the euro continued its descent of recent summits of one month after the Germany have voted for a second package of assistance for the Greece, provided that the holders of bonds share the load. It is in disagreement with the opinion of the European Central Bank who fear that any change to the Greek debt could trigger a "credit event" which, to injure other fragile economies of the euro area.
"The escalation of tensions between the Germany and of the ECB - tensions who believes that markets had been resolved - has been a key factor in undermining confidence,"said Derek Halpenny, global European research head of currency at the Bank of Tokyo-Mitsubishi UFJ.""
"For financial markets to remain stable and sustained euro must be a resolution of the German-ECB conflict", he added.
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