Debt crisis: European markets turn sour on fresh banking fears
Published 11/08/2011 | 12:37
There was renewed market volatility today as fresh fears over the banking sector jeopardised the recent nervous recovery.
The FTSE 100 Index rose 22.3 points to 5029.5 but had earlier been up as much as 150 points after buyers went in search of cheap-looking stocks, despite the continued fear over the US and eurozone debt storms.
But fresh concerns about the health of French banks at one point caused the London market to slip 10 points into negative territory in another day of uncertain trading.
France's biggest bank, Societe Generale, has asked the regulator to investigate the rumours surrounding it, claiming they are unfounded.
The bank is exposed to Greek government debt.
Panic has descended on world markets in recent days amid fears that the twin debt crises in the eurozone and the US will lead the world back into recession.
The Dow Jones Industrial Average tumbled nearly 5pc last night after a short-lived relief rally caused by the Federal Reserve's two-year pledge of low interest rates was overtaken by fresh eurozone debt worries.
The fears over France's debt rating caused the FTSE 100 Index to slump 157 points yesterday, but with Asian markets showing resilience the top flight today staged an uncertain recovery.
Mining and energy stocks were among the biggest risers while banking shares were particularly volatile as they were affected by the developments overseas.
There was little in the way of corporate news to drive markets, with one of the main gains outside the top flight coming from Bloomsbury Publishing after it noted "significant improvement" in sales throughout July and early August, due in part to strong e-book performance during the holiday season.
The update on the day of the company's annual meeting gave a boost to shares in the publisher, which lifted 2.5p to 104.5p.
Online food delivery firm Ocado suffered another shares drop after it was reportedly downgraded by Goldman Sachs, which helped the business float last year. The company, which has recently suffered slowing growth because it lacks capacity to meet demand, saw it shares drop 3pc, or 3.8p at 129.8p.