Markets: New political threats for eurozone

Barclays dropped 9p – a fall of 4.2 per cent – to 204.6p, Royal Bank of Scotland shed 0.9p or 3.7 per cent to 23.13p while Lloyds Banking Group surrendered 0.7p or 2.4 per cent at 29.39p.

Shavaz Dhalla, a trader at Spreadex, said: “Dismay could be a term used to describe global markets this afternoon as a series of poor economic data from the eurozone, exacerbated by news indicating that the Dutch government was close to collapse, brought global markets to their knees.

“This, coupled with the uncertainty regarding the potential for a new but less eurozone-friendly French president, caused investors to flee in the face of uncertainty.”

The benchmark FTSE 100 index fell 106.58 points or almost 1.9 per cent to close at 5,665.57.

A key purchasing managers’ survey of China’s manufacturing sector revealed the industry was still in decline, albeit at a slower pace.

This knocked the heavily-weighted mining sector, which relies on demand from resource-hungry China, with Vedanta Resources dropping 6 per cent or 70p to 1,167p, while Rio Tinto slid 171p at 3,376p.

There were only two risers in the top flight – British Sky Broadcasting and Smiths Group.

Vodafone lost earlier gains despite announcing a £1.04 billion deal to buy struggling telecoms firm Cable & Wireless Worldwide, which will help it bolster its corporate arm in the face of slow consumer growth. Shares were down 0.1p at 171.4p.

NEW YORK: Wall Street fell last night as political turmoil in Europe cast doubts on the eurozone’s ability to push through measures to end its debt crisis and as Wal-Mart sank following a report it stymied a bribery probe.

The Dow Jones industrial average closed down 102.09 points, or 0.78 per cent, at 12,927.17 while the Standard & Poor’s 500 Index was down 11.59 points, or 0.84 per cent, to close at 1,366.94. The Nasdaq Composite Index ended down 30.00 points, or 1.00 per cent, at 2,970.45.