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Eurozone Debt: FTSE 100 Suffers Losses Over Renewed Debt Crisis Fears

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Unsettled investors moved cautiously around the London market today after renewed fears over the eurozone debt crisis triggered a massive sell-off across the globe.

The FTSE 100 Index saw more than £33bn - 2.2% - wiped from its value yesterday as traders fretted over Spain's ability to keep on top of its spiralling debts.

London's leading shares index showed no signs of rebounding this morning as it opened just 10 points ahead at 5604, following declines of 1% in Japan and Hong Kong overnight.

Spain will remain in focus as its borrowing costs are close to unsustainable levels, with 10-year bond yields sitting around 5.9%, while Italy's are not far behind at 5.6%.

Concern about the strength of Spain's economy came despite recent austerity measures to hammer its finances back into shape.

But with the country in recession and battling unemployment close to 23%, there are fears the country may be forced to ask for a bailout, which would put the eurozone under further pressure.

However, the banking sector recouped some of yesterday's losses as Barclays added 2% and Lloyds regained 1% but Royal Bank of Scotland remained in the red with a fall of 1%.

Mining stocks also gave the FTSE 100 index a lift with Fresnillo and Kazakhmys both up by nearly 2%.

The US economy also weighed on world markets yesterday, after figures last week showed that its non-farm payrolls figure was up by 120,000 in March, well below expectations and down on recent growth of more than 200,000.

Markets have also been hit in recent weeks by fears that China's growth is slowing as its exports are impacted by the weakness of some of its markets.

And tensions between the West and Iran have helped drive Brent crude oil prices above 120 US dollars a barrel, adding to fears that high oil prices will further dampen the world economy.

The ongoing uncertainty has pushed the price of gold higher, as it is seen as a safe-haven investment in times of economic difficulty, sitting at around 1,659 US dollars an ounce.

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