Shares tumble as the Fed launches Operation Twist

SHARES on the FTSE 100 index fell more than 200 points on Thursday morning and other financial markets tumbled after the US Federal Reserve issued a gloomy economic forecast and announced new measures to try and boost growth.

In Asia, Japan's Nikkei closed down more than two per cent and in Hong Kong the Hang Seng lost almost five per cent. The damage was even worse in Jakarta where shares fell nearly nine per cent.

The collapses came after the US central bank unveiled a $400bn bond-buying scheme, nicknamed Operation Twist, designed to stave off growing fears of another recession. It has been reported that the Bank of England is likely to follow suit with a new round of quantitative easing.

The bad news continued as commodity prices slumped after it was announced that Chinese factory output had fallen for a third consecutive month in September because of weak demand from overseas markets.

Read a full report at the Guardian. ·