Markets slide on Europe debt fears

EUROPEAN debt worries and fears over the global recovery sent London's FTSE 100 index to losses of more than 1 per cent yesterday.

The benchmark index was in the red for the entire session after falls of nearly 4 per cent in Asia as traders in the region reacted to Friday's disappointing US job figures.

The Footsie eventually closed 1.1 per cent lower at 5,069.06 as Wall Street's Dow Jones Industrial Average – which fell 3 per cent on Friday – saw another turbulent start to trading and remained below the psychologically important 10,000 mark.

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Markets have seen further volatility over Europe's debt woes after officials in Hungary – not part of the eurozone – signalled that the nation was at risk of a Greek-style fiscal crisis. Investors worry that already-weakened European banks could be punished heavily if sovereign debt crises spread.

IG Index's head of research, Anthony Grech, said: "There's little respite to be found in the markets with concerns over the global economic outlook weighing."

The euro hit fresh four-year lows against the dollar over the weekend – at $1.188 – before recovering slightly. It also lost further ground against the pound, which is now trading above 1.21 – its highest level since November 2008.