European debt crisis: stock markets tumble as Italy fears mount

European debt crisis: stock markets tumble as Italy fears mount

World stock markets accelerated their falls on Tuesday as Italy struggled to avoid being sucked into the escalating European debt crisis, and Greece moved closer to a default.

Bank shares were in retreat across Europe, driven by fears that Italy will soon be unable to borrow on the international money markets. The euro continued to lose value rapidly and hit a low of $1.388 – it has now lost more than 3 cents against the dollar since Monday morning.

The FTSE 100 index slumped by 133 points at one point in early trading in London, down more than 2.25%. At noon it was hovering around 5834 points, a fall of 95 points. Barclays fell as much as 6.5% to 218p followed by Lloyds, down 4.7% at 42p, with every share in the index losing ground.

"The banks are biggest fallers, because of concerns that the European crisis is spreading to Italy and Spain," said David Jones, chief market strategist at IG Index.

..cont'd

http://www.guardian.co.uk/business/2011/jul/12/stock-markets-tumble-europe-crisis-italy