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| Anxiety drags down US and European stock markets | Anxiety drags down US and European stock markets |
| (about 3 hours later) | |
| The index of London's leading shares has fallen 2.4%, while US and European markets have also posted sharp declines amid continued anxiety about the state of the global economy. | The index of London's leading shares has fallen 2.4%, while US and European markets have also posted sharp declines amid continued anxiety about the state of the global economy. |
| The FTSE 100 closed down 124 points at 5,549 points. | The FTSE 100 closed down 124 points at 5,549 points. |
| Markets in Frankfurt and Paris were down 2.9% and 4.1% respectively. | Markets in Frankfurt and Paris were down 2.9% and 4.1% respectively. |
| Wall Street also ground, with the S&P 500 down 1.2% and the Dow Jones falling 1.6%. | |
| Analysts said US Federal Reserve chair Janet Yellen's gloomy economic assessment on Wednesday had added to investors' worries. | Analysts said US Federal Reserve chair Janet Yellen's gloomy economic assessment on Wednesday had added to investors' worries. |
| In testimony to Congress, she said that 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, she said that financial conditions in the US had become "less supportive" of growth and warned of the "increased volatility" in global financial markets. |
| Rabobank European strategist Emile Cardon said the worst could still lie ahead: "The bad news in now coming from everywhere - China, Portugal, the US, the commodity sector, the banking sector. It's like several smaller crises could combine into one big crisis." | Rabobank European strategist Emile Cardon said the worst could still lie ahead: "The bad news in now coming from everywhere - China, Portugal, the US, the commodity sector, the banking sector. It's like several smaller crises could combine into one big crisis." |
| Analysis: Kamal Ahmed, economics editor | Analysis: Kamal Ahmed, economics editor |
| The great sell off continues. Why? | The great sell off continues. 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. | On the FTSE 100, the biggest losers were a mix of financial firms and mining stocks. |
| Barclays was the worst-performing bank, sliding 6.4%. Its shares have fallen by almost a third since the start of this year, leaving it worth £25bn. | Barclays was the worst-performing bank, sliding 6.4%. Its shares have fallen by almost a third since the start of this year, leaving it worth £25bn. |
| That is about the same value as Royal Bank of Scotland, whose shares have fallen more than a quarter this year. | That is about the same value as Royal Bank of Scotland, whose shares have fallen more than a quarter this year. |
| Falls in bank shares this year | Falls in bank shares this year |
| Mining giant Rio Tinto fell 3.4% after it revealed that it had made an annual loss of £596m. | Mining giant Rio Tinto fell 3.4% after it revealed that it had made an annual loss of £596m. |
| Fellow miners Glencore and Antofagasta shed 6.2% and 2.2% respectively. | Fellow miners Glencore and Antofagasta shed 6.2% and 2.2% respectively. |
| However, others in the resources sector fared better, with Randgold Resources rising 7.5%, while Fresnillo added 5.4%. | However, others in the resources sector fared better, with Randgold Resources rising 7.5%, while Fresnillo added 5.4%. |
| In Paris, the bank Societe Generale was particularly hard hit, falling more than 13%. | In Paris, the bank Societe Generale was particularly hard hit, falling more than 13%. |
| The bank's shares tumbled after it said it was scrapping its target of achieving a 10% return on equity by the end of this year. | The bank's shares tumbled after it said it was scrapping its target of achieving a 10% return on equity by the end of this year. |
| In Frankfurt, Deutsche Bank was down 6.1%, as its share price continued to suffer from concerns about the strength of its balance sheet. | In Frankfurt, Deutsche Bank was down 6.1%, 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. | 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. |
| US banks such as Citigroup and JP Morgan also fell on Thursday, with declines of 5.9% and 4% respectively. | US banks such as Citigroup and JP Morgan also fell on Thursday, with declines of 5.9% and 4% respectively. |
| On the commodities markets, Brent crude was down 0.7% to $30.13, while US light crude fell 4% to $26.35. | On the commodities markets, Brent crude was down 0.7% to $30.13, while US light crude fell 4% to $26.35. |
| On the currency markets, the pound hit a 13-month low against the euro, falling 1.17% to €1.2713. | On the currency markets, the pound hit a 13-month low against the euro, falling 1.17% to €1.2713. |
| The currency was also down 0.5% against the dollar at $1.4452. | The currency was also down 0.5% against the dollar at $1.4452. |