Shares tumble across world as eurozone fears return

Stock markets around the world plummeted yesterday as the eurozone debt crisis came roaring back again and fresh doubts about the sustainability of the US recovery gripped investors.

The FTSE 100 Index of the UK's leading shares shed 2.24 per cent of its value, some £33bn, and Wall Street's Dow Jones Index fell 1.7 per cent. The German and French stock markets also sank dramatically, with the Dax closing down 2.5 per cent and Paris's CAC 40 slipping by 3.1 per cent.

Yesterday was the first day's trading in Europe since figures were released on Good Friday, showing that just 120,000 new jobs were created in the American economy in March. Equity investors also reacted with alarm to the fiscal situation in Spain, where the government is struggling to bring down the country's hefty budget deficit. The head of Spain's central bank warned that the country's fragile banks might need to raise still more capital if the slump continues. This sent Spanish 10-year borrowing rates briefly above 6 per cent at one stage, close to the levels that saw Greece, Ireland and Portugal forced to seek bailouts from the EU and the International Monetary Fund. Read More