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European markets have worst trading day in two years

On the back of yesterday’s sharp drop, markets opened badly this morning.

Image: Sang Tan/AP/Press Association Images

TODAY’S EUROPEAN MARKETS opened badly off the back of closing following the fastest fall seen in over two years yesterday.

At the time of publishing, the FTSE 100 is -2.83 per cent; CAC is -2.82 per cent; DAX is -3.59 per cent and IBEX -2.59

Meanwhile, Nikkei is -2.51 per cent.

It was expected that the European stocks would open lower this morning, with the Irish Times reporting that yesterday’s performance only helped to intensify fears about the strength of the global economy and its ability to recover.

German shares were the hardest hit in Europe yesterday, falling by 5.8 per cent.

The Wall Street Journal says that fears were renewed that Europe’s bank cannot withstand the current debt crisis and that radical steps might have to be taken to preserve the Euro currency.

It points out that Berlin and Paris may have to act quickly as Europe’s financial system could seize up and bring the euro zone into recession, if investors lose confidence in the region’s banks.

The Irish Times notes that traders blame weak US economic figures and the lack of a convincing solution to the European debt crisis for the growth in selling.

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An interview with US President Barack Obama is due to be broadcasted on Sunday on American channel CBS.

The Irish Times reports that in it, he says that “we are in danger of not having a recovery that is fast enough to deal with a genuine unemployment crisis for a whole lot of folks out there”.

French President Nicolas Sarkozy and German Chancellor Angela Merkel met earlier this week to discuss the Eurozone crisis.

They decided to merge the corporate tax rate and called for a ‘Eurozone government’

Read: Mixed day for markets on back of ‘Merkozy’ proposals>

Read: France and Germany merge corporate tax rate – can call for a ‘Eurozone government’>

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