FTSE Follows Asian Markets And Goes Into Friday Freefall

Panic Spreads To Europe - FTSE Down Nearly 3% In Early Trading

PRESS ASSOCIATION -- London's leading shares index has sustained more heavy losses as the turmoil engulfing world markets shows no signs of easing.

The FTSE 100 Index opened on Friday more than 2.5% lower - off 140 points at 5253 - amid investor panic over the deepening eurozone debt crisis and health of the US economy.

It came after the FTSE 100 registered its biggest fall of the year on Thursday - shattering pensions and savings funds as it wiped £50 billion off its value - while Wall Street's Dow Jones Industrial Average plunged 4.3%, one of its worst ever falls.

The plunge in share prices came amid rising fears that Italy and Spain, the eurozone's third and fourth largest economies, could default on their debt and require EU-funded bailouts.

Asian stock markets plummeted on Friday as investors sold riskier assets amid fears the US is heading back into recession and Europe's debt crisis is worsening.

Japan's Nikkei 225 stock average slid 3.4% to 9,328.74 and Hong Kong's Hang Seng dropped 4.4 % to 20,912.60. South Korea's Kospi index shed 3.6 % to 1,945 and Taiwan's benchmark slumped 4.4 % to 7,952.98. Australia's benchmark dropped 4% to 4,103.10.

Richard Hunter, head of UK equities at Hargreaves Lansdown stockbrokers, said markets could continue to fall on Friday, particularly if closely-watched jobs data from the US reveals a further slowdown in the economy.

He said: "Investors are pessimistic at the moment, the general market mood is to try to prepare for the worst. It's difficult to see anything positive coming from the data today unless they reveal absolutely barnstorming figures."

Worried traders are waiting for Friday's release of US unemployment figures for July, which is expected to show weak job growth and a rise in the unemployment rate.

The plunge in global markets is further bad news for Chancellor George Osborne, who has faced increasing pressure over the pace of Britain's economic recovery. Robert Chote, chairman of the Office for Budget Responsibility, on Friday said the watchdog's growth forecast of 1.7% - made in March - was likely to be missed.


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