Global sell-off hits share prices

World markets have been volatile for the past few weeks

World share prices have fallen sharply again, this time due to concerns over surging oil prices, rising interest rates and jittery US consumers.

Share dealers across Europe had their fingers on the sell button, with the leading indexes in France, Germany and the UK all falling by nearly 2.5%.

In the US leading shares had slipped 1.6% by the close of trade.

Global markets have been volatile in recent weeks, worried about signs that the US economy is overheating.

Warning signs

On Tuesday the BBC Global 30 Index of leading European, Asian and North American stocks was down 2.4%.

Traders are worried that high oil and commodity prices and a surging US economy will send inflation higher, putting pressure on central bankers there to raise interest rates.

Higher interest rates mean higher borrowing costs for firms and can hit corporate profits, so they are usually a signal for investors to sell-up and move more of their money into fixed-rate investments like bonds.

On Tuesday crude oil prices passed $72 in New York trading and a report from the US Conference Board said consumer confidence had fallen sharply in May, although it had been at a four-year-high in April.

Retail bellwether Wal-Mart also disappointed investors with its May sales report.

Elsewhere on Tuesday, investment bank Citigroup issued a report claiming that the recent volatility in European markets should die down in a couple of weeks as they find a new "equilibrium" and some technical imbalances caused by a surge in derivatives trading are resolved.

Derivatives include investments like futures, options and swaps, which can earn money based on the performance of shares or stock market indexes.