World's stock markets hit by global shocks

A DOWNGRADE for Spain's credit rating, violence in Libya and weak data from China and the US heaped pressure on the world stock markets yesterday, with traders speculating that there could be more woe to come.

"It's an unholy triumvirate of bad news," said Chris Purdy, trader at Spreadex. The FTSE closed down 92 points, or 1.6 per cent, at 5,845.29, a fresh year low.

Purdy said the index had plunged through the support barriers he was expecting and it was anyone's guess how much further the sell-off might go.

Banks were weaker as risk appetite remained off the menu for investors after Moody's cut Spain's sovereign credit rating and warned of further cuts.

Brent crude traded above $114 a barrel, near two-and-a-half year highs, as military activity intensified in Libya.

Miners fell with base metal prices, as high oil prices threaten to derail the global economic recovery. Weak Chinese import data also weighed on the sector, casting doubt on demand from the world's biggest metals consumer.

A number of blue chips suffered in the rout, including Standard Life and Cairn Energy.