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Panic spreads through financial markets

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Panic spreads through financial markets

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The slight sense of renewed optimism in world stock markets seemed to evaporate this morning, with banks in particular taking a battering. There had been something of a bounce in Europe in initial trading, but gloom soon returned.

In London, general nervousness sent the FTSE 100 tumbling back into the red after opening in positive territory. The fall was led by shares in the Royal Bank of Scotland, which fell by 30 percent. The UK Treasury was reported to be considering a 60bn euro deal to shore up the British banking sector.

The atmosphere was even worse in Moscow, where major falls on the RTS and Micex markets forced a suspension of trading even before the scheduled start.

Earlier, confidence had risen across Asia, after Australía made a full percentage point cut in interest rates. Japan’s Nikkei finished three percent DOWN, but had been below five percent in earlier trading.

The gloom was reflected on today’s front pages. The Financial Times pointed out how the panic was spreading fast, Figaro highlighted the lack of confidence pervading the markets, while Liberation simply called it The Worst Day.