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| Cyprus bailout crisis shakes markets | Cyprus bailout crisis shakes markets |
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| The euro dived and shares suffered sharp losses after a controversial bailout package for Cyprus threatened to trigger fresh turmoil in the eurozone. | The euro dived and shares suffered sharp losses after a controversial bailout package for Cyprus threatened to trigger fresh turmoil in the eurozone. |
| Eurozone finance ministers demanded on Sunday that Cypriots pay up to 10% of their bank deposits in exchange for a €10bn (£8.5bn) bailout, prompting panic across the island as people rushed to cash machines to withdraw their savings. | Eurozone finance ministers demanded on Sunday that Cypriots pay up to 10% of their bank deposits in exchange for a €10bn (£8.5bn) bailout, prompting panic across the island as people rushed to cash machines to withdraw their savings. |
| Traders are concerned this could set a dangerous precedent that could trigger bank runs in other eurozone countries. | Traders are concerned this could set a dangerous precedent that could trigger bank runs in other eurozone countries. |
| Mohamed El-Erian, the chief executive of Pimco, the world's largest bond investor, said: "In Europe, [the Cyprus bailout] could well undermine the recent tranquil behaviour of depositors and creditors in other vulnerable European economies – in particular Greece, Italy, Portugal and Spain." | Mohamed El-Erian, the chief executive of Pimco, the world's largest bond investor, said: "In Europe, [the Cyprus bailout] could well undermine the recent tranquil behaviour of depositors and creditors in other vulnerable European economies – in particular Greece, Italy, Portugal and Spain." |
| The euro slid as low as $1.2888 in early trade, its lowest point since December. One euro is now worth 86p. | The euro slid as low as $1.2888 in early trade, its lowest point since December. One euro is now worth 86p. |
| In the stock markets, the FTSE 100 tumbled 100 points in the opening minutes of trading, to 6390, a fall of 1.5%. France's main share index, the CAC 40, dropped 2.1%. Spain's IBEX was down 2.9%, while the Italian FTSE MIB sunk 2.8%. | In the stock markets, the FTSE 100 tumbled 100 points in the opening minutes of trading, to 6390, a fall of 1.5%. France's main share index, the CAC 40, dropped 2.1%. Spain's IBEX was down 2.9%, while the Italian FTSE MIB sunk 2.8%. |
| Gold, which is seen as a safe haven in troubled times, rose above $1,600 for the first time in more than two weeks. | Gold, which is seen as a safe haven in troubled times, rose above $1,600 for the first time in more than two weeks. |
| Despite assurances from European officials that Cyprus is 'exceptional' and the measures are 'unique', El-Erian said the Cyprus bailout has driven investors to demand higher returns to hold risky assets. | Despite assurances from European officials that Cyprus is 'exceptional' and the measures are 'unique', El-Erian said the Cyprus bailout has driven investors to demand higher returns to hold risky assets. |
| In the debt markets, the yield on Spain's 10-year government bond – effectively the interest rate – jumped 17 basis points to 5.098%. Yields on 10-year Italian debt rose 13bp to 4.736%. | In the debt markets, the yield on Spain's 10-year government bond – effectively the interest rate – jumped 17 basis points to 5.098%. Yields on 10-year Italian debt rose 13bp to 4.736%. |