FTSE falls again as City traders fear Greece will default on loans

12 April 2012

The FTSE 100 dived again this morning as the City made a nervous start to the working week following the recent stock market turmoil.

The blue chip index slipped almost two per cent in the first few minutes of trading on fears that Greece will be allowed to default on part of its debts as part of a vast euro-zone rescue plan.

However, it later recovered the lost ground and stood at 5106.84, up 40.03 points by late morning.

The weak start came after more sharp falls on the Asian stock markets with Japan's Nikkei 225 Index down more than two per cent and the Hang Seng Index in Hong Kong nearly three per cent lower.

Cameron Peacock, market analyst at IG Markets, said: "The key demand from investors is for action as opposed to words."

Last week's rout saw almost £80 billion wiped from the value of Britain's biggest companies with the FTSE plummeting 4.7 per cent on Thursday, its biggest one-day fall for two and a half years. Over the week as a whole it lost more than 5.5 per cent.

European leaders are thrashing out a £1.7 trillion bail-out that would reduce Greece's unsustainable debt burden.

Chancellor George Osborne warned over the weekend that decisive action was required within six weeks.

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