FRANKFURT, Jan. 4 (Xinhua) -- European stock market fluctuations have continued into the new year, raising fresh fears over serious economic troubles ahead.
All European markets were struggling on Thursday with the Stoxx Europe 600 dropping by almost 1 percent, as well as French CAC 40 and Germany's Dax 30 decreasing by 1.55 percent and 1.66 percent respectively.
The U.S. tech giant Apple unexpectedly cut its revenue forecasts Wednesday, triggering fears that the impact of recent trade disputes on many companies' revenue was more than expected.
On Friday, European equity markets bounced back ahead of trade negotiations between China and the U.S..
Many fear that European markets would be more turbulent with loss of momentum in the euro zone's economic growth.
Compared with the start of 2018, top financial institutions have cut their growth forecasts for the euro zone in 2019, with the European Central Bank (ECB) and the International Monetary Fund (IMF) respectively giving a 1.7 percent and 1.9 percent growth forecast.
The ECB identified protectionism as a key risk for the euro zone in 2019 along with vulnerabilities in emerging economies and market volatility.
The IMF believes that the increase of employment and wage would support domestic demand, and most countries in Europe will continue with a solid growth in 2019.
However, in the short term, escalating trade tensions and tightened global financial conditions could undermine investment and weigh on growth in Europe, the IMF's latest regional outlook suggested.
In the medium term, observers feel that risks would stem from delayed fiscal adjustment and structural reforms, demographic challenges, rising inequality and declining trust in mainstream policies.
Aside from external pressures, the region is blighted by political upheaval, including Italy's budget crisis and the "yellow vest" movement in France, which may shape the European Parliament election in May 2019. Right-wing, populist parties may also take the opportunity to expand their political territory in the European Union (EU), undermining stability.
Also, Brexit is on the horizon. A "no-deal" Brexit would lead to high trade barriers between Britain and the rest of the EU with negative consequences for growth, the IMF stated.
Observers suggest that Europe should firmly embrace free trade and multilateralism to overcome these difficulties.
