Trouble in Europe casts shadow across markets

Storm clouds are seen above the Canary Wharf financial district Credit: Reuters

World markets suffered heavy losses today as political uncertainty in France and the Netherlands threatened to derail plans to stabilise the eurozone.

Wall Street's Dow Jones Industrial Average fell more than 1.3% after Dutch prime minister Mark Rutte said he would submit his government's resignation after key budget cut talks failed, casting doubt on future austerity measures.

More on the effects of the Euro uncertainty from Economics Editor Richard Edgar.

And the FTSE 100 Index in London dropped more than 2% or 133 points to 5638.1 as concerns in the Netherlands were compounded to be uncertainty in France, where President Nicolas Sarkozy came second in Sunday's first round of the presidential election.

Mr Sarkozy lost to socialist rival Francois Hollande, while third-place Marine Le Pen took the largest share of the vote for her far-right National Front party.

The uncertainty in both countries rocked the banking sector with:

  • Barclays dropping 7.2p to 206.3p

  • Royal Bank of Scotland losing 3% or 0.7p to 23.3p

  • Lloyds Banking Group falling 0.6p to 29.4p