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Anxiety drags down European markets | Anxiety drags down European markets |
(about 1 hour later) | |
London's top shares have fallen nearly 2.4%, while other European markets have seen even bigger falls, amid anxiety about the health of the global economy. | |
By lunchtime, the FTSE 100 index was down 135.32 points to 5,536.98. | |
At the same time, share indexes in Frankfurt and Paris were down 2.7% and 3.8% respectively. | |
Analysts said US Federal Reserve boss Janet Yellen's gloomy economic assessment on Wednesday had added to investors' worries. | Analysts said US Federal Reserve boss Janet Yellen's gloomy economic assessment on Wednesday had added to investors' worries. |
In testimony to Congress, Ms Yellen said financial conditions in the US had become "less supportive" of growth and warned of the "increased volatility" in global financial markets. | In testimony to Congress, Ms Yellen said financial conditions in the US had become "less supportive" of growth and warned of the "increased volatility" in global financial markets. |
Analysis: Kamal Ahmed, economics editor | Analysis: Kamal Ahmed, economics editor |
The great sell off continues. | The great sell off continues. |
Why? | Why? |
It's a mix - part economic fundamentals; part market emotion, as herding investors follow each other down a negative spiral, fearful of being left beached as the tide goes out; and part brute market forces, the major trading houses looking to make a profitable turn on share prices which they bet are not going up any time soon. | It's a mix - part economic fundamentals; part market emotion, as herding investors follow each other down a negative spiral, fearful of being left beached as the tide goes out; and part brute market forces, the major trading houses looking to make a profitable turn on share prices which they bet are not going up any time soon. |
Read Kamal in full | Read Kamal in full |
Coco bonds: what are they and why have they hit bank shares? | Coco bonds: what are they and why have they hit bank shares? |
Why use negative interest rates? | Why use negative interest rates? |
On the FTSE 100, the biggest losers were a mix of financial firms and mining stocks. | |
Barclays was the worst performing bank, sliding 6.2% | |
Mining giant Rio Tinto fell 3.7% after it revealed that it had made an annual loss of £596m. | |
Fellow miners Glencore and Antofagasta shed 5.4% and 1.8% respectively. | |
However, other firms in the sector fared better. Randgold Resources rose 6.6%, while Fresnillo added 6.9%. | |
In Paris, Societe Generale bank was particularly hard hit, falling more than 13%. | |
The bank's share price tumbled after it said it was scrapping its target of obtaining a 10% return on equity by the end of this year. | |
In Frankfurt, Deutsche Bank was down about 8%, as its share price continued to suffer from concerns about the strength of its balance sheet. | |
Banks are under pressure across Europe because of fears that exposure to bad loans may leave them ill-prepared to cope if the global slowdown intensifies. | |
On the commodities markets, Brent crude was down 1.6% to $30.34, while US light crude fell 3.9% to $26.38. | |
On the currency markets, the pound hit a 13-month low against the euro, falling 1.12% to €1.2719. | |
The currency was also down 0.71% against the dollar at $1.4420. |