World markets down on debt fears

Fresh worries about the strength of the economies in the UK and eurozone saw world markets suffer another torrid session today.

Renewed fears about the eurozone debt crisis saw France and Italy’s borrowing cost rise, while the UK’s manufacturing sector failed to return to growth in the first two months of 2012.

This overshadowed the lowest US unemployment claims for four years as The Dow Jones Industrial Average fell 1%.

But the FTSE 100 Index, which had been down as much as 40 points earlier, was up 10.5 points at 5714 after a miners’ rally pulled it back into the black.

London’s leading shares index fell 2% yesterday after America’s central bank appeared to back away from providing additional emergency support to the world’s biggest economy, and concern grew about Spain’s prospects.

European markets also clawed back some of their earlier losses, with the Dax in Germany and the Cac-40 in France down about 0.2%.

In the UK, banking shares were among the biggest fallers after Italian lender UniCredit’s shares were temporarily suspended, prompting fears of another financial crisis.

Lloyds was down 0.5p at 31.3p, Royal Bank of Scotland was off 0.3p at 25.8p and Barclays down 1.4p at 217.1p.

BSkyB was a prominent faller, down 3% after it admitted its Sky News channel had authorised reporters to hack into people’s emails in a move that could damage its reputation. Shares were down 17.8p at 640.3p.

But heavily weighted miners were on the front foot after yesterday’s sell-off, with Glencore the biggest riser up 15.3p at 404.7p.