Increasing fears about a possible bailout of Spain and growing military tensions between North and South Korea have sent global stock markets crashing again.
London’s FTSE 100 ended Tuesday’s session down 128 points, or almost 2.5%, led lower by banks and miners, while European bourses remained a sea of red through the day.
It was the same story when Wall Street opened at 1430 BST, plunging almost 300 points at one stage to less than 9,800 before narrowing the deficit slightly.
The sell-off had kicked off in the US last night when the Dow Jones lost 126 points, continuing in Asia this morning where markets dumped over 3%.
European banks were off the menu after the International Monetary Fund yesterday told Spain it must reform its creaking banking system as the country attempts to slash its huge budget deficit and unemployment at 20%.
Stockbrokers were swamped by investors wanting to sell Banco Santander and Banco Popular, while French rivals Societe Generale, Credit Agricole, and Britain’s Lloyds Banking featured among the casualties.
Spain's authorities on Saturday stepped in to rescue CajaSur, a regional savings bank controlled by the Vatican. The lender has been struggling due to its exposure to the collapse in the Spanish property sector.
Traders have been worrying for weeks that Spain, Portugal or Italy could go the same way as Greece, bailed out last month to the tune of €110bn.
Even the European Union’s gigantic €750bn loan guarantee scheme, announced earlier this month, has done little to build confidence.
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