Global sell-off shudders markets as euro plunges to 8-month low amid fears of debt default

Lucy Farndon and Heath Aston
UK Daily Mail
Friday, February 5th, 2010

London's top stocks lost another one per cent today as worries over US and European economic health sparked a sell-off for the second session in a row.

The FTSE 100 Index dropped towards the 5000 mark - at levels not seen since last November - after heavy falls on Asian stock markets overnight.

European Central Bank president Jean-Claude Trichet sparked the turbulence when he warned that eurozone countries other than Greece needed 'strong reforms' to rein in their sharply rising budget deficits.

Mr Trichet's unusually stern warning took investors by surprise and they dumped euros on the foreign exchange markets.

The single currency was still below $1.38 against the US dollar, this morning marking a eight-month low. The pound climbed against the euro to 1.146

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