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Global market mood shifts as Australian shares sink into bear market -

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ELIZABETH JACKSON: It's official: Australian shares are now trading in a 'bear market' - trading lingo for a sharp drop in the value of the stock market of over 20 per cent.

There's a shopping list of worries for local investors, with particular concerns for banking and resources stocks.

But, as AM's David Taylor reports, this is far from just an Australian story, with markets around the world dealing with growing uncertainty about the state of the global economy - although today global stocks have ended the week just a little higher.

DAVID TAYLOR: The Prime Minister, Malcolm Turnbull, says it's an exciting time to be an Australian.

MALCOLM TURNBULL: So this is a great time to seize the day. I'm filled with optimism.

DAVID TAYLOR: The markets are certainly providing plenty of excitement for investors.

Michael McCarthy is the chief markets strategist with CMC Markets stockbroking:

MICHAEL MCCARTHY: Absolutely, especially for those who are actively involved in markets. And it's now very easy for individuals to profit from falling markets as well as rising markets. So for some who are actively involved with markets, it's actually been a very profitable time.

DAVID TAYLOR: Over the past week Australian stocks lost 4.2 per cent or $59 billion dollars in value.

But share markets are falling all over the world. The Chinese share market is down 20 per cent so far this year; Europe is off around 15 per cent and the US is down 10 per cent.

Much of the recent share market weakness has come off the back of a slump in the price of crude oil.

But global share markets have looked particularly vulnerable since the world's biggest central bank, the US Federal Reserve, started to tighten monetary policy - or raise interest rates - in December.

But chairwoman Janet Yellen says this latest global share market rout is not the Fed's fault.

Ms Yellen's speaking here before a US Senate Banking Committee:

JANET YELLEN: (inaudible) fears that have developed in the market about the potential for weakening global growth. So I don't think it's mainly our policy.

DAVID TAYLOR: David Buik is a market commentator for stockbroker Panmure Gordon. He says the market's actually lost confidence in Ms Yellen and how she's steering the world's biggest economy.

DAVID BUIK: And they have yet to have forgiven her for increasing interest rates in December when, in point of fact, the time to do it was six months before that. I can only describe the mood as incandescent with rage.

DAVID TAYLOR: Global markets might have focussed their rage on the Federal Reserve, but here in Australia, Michael McCarthy says, investors have a shopping list of worries.

MICHAEL MCCARTHY: Whether it's slowing growth in China, slowing growth in the US, concerns about higher US interest rates, concerns about lower oil prices or concerns about the global banking system.

DAVID TAYLOR: There's a lot of concerns?

MICHAEL MCCARTHY: There's a lot of concerns.

DAVID TAYLOR: But if you're after a ray of light: according to Bloomberg, the chief executive of JP Morgan, Jamie Dimon, has just bought up $26 million worth of stock in the investment bank.

It seems, after watching the investment bank sink around 20 per cent on the market, he thinks it's time to buy.

ELIZABETH JACKSON: David Taylor with that report.