European debt fears fuel more markets gloom
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Your support makes all the difference.London's blue chip share index slumped to its lowest level for eight months today as European debt fears led to another bleak session for global markets.
Military tensions in Korea added to mounting concerns over the eurozone, sending the FTSE 100 Index plummeting below 5000 and to levels not seen since last September. It closed down 128.9 points at 4940.7.
America's Dow Jones Industrial Average also nosedived into the red once more, down 2% soon after opening, while markets across Europe were also badly hit.
The Cac 40 in France was 3.5% down and Germany's Dax declined by 2.7%.
Market analyst Richard Hunter of Hargreaves Lansdown Stockbrokers said markets were suffering from a "toxic cocktail" of European debt fears and the threat of military action on Korea.
With the yen's strength against the weakened euro also hammering exporters, Asian markets dropped heavily overnight. Japan's Nikkei slumped 3%. Hong Kong's Hang Seng index dropped 2.5%.
It has been a turbulent few days for global stock markets after Germany's surprise move last week to ban speculators from betting against the eurozone.
News at the weekend of a Spanish bank bailout added to worries over Europe, with investors now fearing for the impact on the global economic recovery.
Recent falls have left the Footsie down nearly 15% in little more than a month after reaching a 22-month high above 5800 at one stage in April.
Last week alone, the market lost more than 200 points in just three sessions.
The euro has also taken a hammering - down to 1.22 US dollars - amid fears that massive debts will cause defaults by weaker countries in the European Union.
Today's fall for the FTSE 100 Index came despite news that the UK economy grew at a faster pace than initially thought in the first three months of 2010, with 0.3% expansion.
A decent set of annual results from retailer Marks & Spencer also failed to soothe investors. Its profits haul of £632.5 million was better than last year and near the top end of market expectations, but shares still fell around 2%.
Banks and miners were the worst impacted in today's sell-off, with Lloyds Banking Group down 8% at one stage.
Michael Hewson, analyst at CMC Markets, said: "The optimism of previous corrections seems to be missing and there is a feeling that the actions of sovereign governments since the bailouts in 2008 have contributed to the current fiscal crisis.
"Moves by Spanish regulators to encourage consolidation in the Spanish banking sector have put the wind up the UK banks, with Lloyds Banking, Royal Bank of Scotland and Barclays taking a pounding."
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