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| Version 1 | Version 2 |
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| Debt concerns hit European shares | Debt concerns hit European shares |
| (9 minutes later) | |
| European shares have fallen sharply for the second straight day as concerns about government debt levels continue to weigh on investors. | European shares have fallen sharply for the second straight day as concerns about government debt levels continue to weigh on investors. |
| In Paris, the Cac 40 index fell 2.5% in morning trading, while in London the FTSE 100 dropped 1.9% and in Frankfurt the Dax lost 1.6%. | In Paris, the Cac 40 index fell 2.5% in morning trading, while in London the FTSE 100 dropped 1.9% and in Frankfurt the Dax lost 1.6%. |
| Earlier, Japan's Nikkei index slumped almost 3%, while stock markets in Hong Kong, Korea and China all fell sharply. | Earlier, Japan's Nikkei index slumped almost 3%, while stock markets in Hong Kong, Korea and China all fell sharply. |
| Debt concerns were sparked by a lack of demand for Portuguese government bonds. | Debt concerns were sparked by a lack of demand for Portuguese government bonds. |
| This reignited fears that countries such as Portugal and Greece would struggle to fund their burgeoning national deficits. | This reignited fears that countries such as Portugal and Greece would struggle to fund their burgeoning national deficits. |
| 'Euro sell-off' | 'Euro sell-off' |
| Greece has outlined ambitions plans to reduce its deficit dramatically over the next two years, but doubts remain about whether its government will be able to deliver such swingeing cuts. | Greece has outlined ambitions plans to reduce its deficit dramatically over the next two years, but doubts remain about whether its government will be able to deliver such swingeing cuts. |
| The real concern is that the whole recovery is nothing more than poorly-directed government stimulus which has simply had the effect of boosting asset prices David Morrison, GFT class="" href="/2/hi/business/8499902.stm">Q&A: Global market turmoil | |
| "It has been a worry for Greece for weeks, but it is now spreading like wildfire, driving equity markets lower, causing further concerns both about medium-term growth prospects," said Kit Juckes at ECU Group. | "It has been a worry for Greece for weeks, but it is now spreading like wildfire, driving equity markets lower, causing further concerns both about medium-term growth prospects," said Kit Juckes at ECU Group. |
| But it is not just stock markets that have been hit. | But it is not just stock markets that have been hit. |
| "It's been a dismal 24 hours as stock markets, commodities and currencies have fallen around the world, while bond default risk has soared [and] investors have fled risky assets into the relative safety of the dollar," said Michael Hewson at CMC Markets. | "It's been a dismal 24 hours as stock markets, commodities and currencies have fallen around the world, while bond default risk has soared [and] investors have fled risky assets into the relative safety of the dollar," said Michael Hewson at CMC Markets. |
| As a direct result of the debt concerns, the euro slid a further 5 cents, or 0.3%, against the dollar to $1.3713, after falling more than 1.5 cents on Thursday. | As a direct result of the debt concerns, the euro slid a further 5 cents, or 0.3%, against the dollar to $1.3713, after falling more than 1.5 cents on Thursday. |
| "It's very bad sentiment for the euro, it's a sell-off for the euro definitely," said Lee Sue Ann at United Overseas Bank at Singapore. | "It's very bad sentiment for the euro, it's a sell-off for the euro definitely," said Lee Sue Ann at United Overseas Bank at Singapore. |
| Asset bubbles | Asset bubbles |
| Concerns over debt levels are also tapping into wider fears about the strength of the global economy, analysts said. | Concerns over debt levels are also tapping into wider fears about the strength of the global economy, analysts said. |
| Some investors believe the recovery is the direct result of governments pumping billions of dollars into their economies to stimulate demand. | Some investors believe the recovery is the direct result of governments pumping billions of dollars into their economies to stimulate demand. |
| When they stop pumping money in, they fear, economies will begin to shrink again. | When they stop pumping money in, they fear, economies will begin to shrink again. |
| Growing budget deficits mean that governments cannot afford to spend much more on boosting their economies. | Growing budget deficits mean that governments cannot afford to spend much more on boosting their economies. |
| "The real concern is that the whole recovery is nothing more than poorly-directed government stimulus which has simply had the effect of boosting asset prices," said David Morrison at GFT. | "The real concern is that the whole recovery is nothing more than poorly-directed government stimulus which has simply had the effect of boosting asset prices," said David Morrison at GFT. |
| Investors are now eagerly awaiting US jobless data out later. | Investors are now eagerly awaiting US jobless data out later. |