Europe shares fall as global share sell-off continues

European markets have continued a steep sell-off, with investors worried about both the eurozone debt crisis and the weak US economy.

The UK's FTSE 100 index was down 1.9%, Germany's Dax was 1.7% lower and France's Cac 40 index fell 0.7%.
Earlier on Friday, Asian markets had slumped with Japan's main index down 3.7% and Hong Kong's 4.6% lower.
In London, banking shares saw heavy falls, with Royal Bank of Scotland down 9%, and Lloyds Banking Group 7% lower.
In a morning of sharp fluctuations, shares in Madrid suddenly turned positive, led by banks, on rumours that the European Central Bank is preparing to buy Spanish and Italian bonds.
Concerns over the ability of governments to pay their debts - which has led to Greece, the Irish Republic and Portugal already being bailed out - has now spread to Spain and Italy.
The gap between German bonds - the safest in Europe - and Spanish and Italian debt again reached a record since the euro was introduced in 1999.
German Chancellor Angela Merkel is due to hold a telephone conference with French President Nicolas Sarkozy later to discuss the latest situation in the eurozone.
On Thursday, investor confidence was hit after European Commission President Jose Manuel Barroso warned that the eurozone's sovereign debt crisis was spreading, sparking fears that Italy and Spain might become engulfed in the problems.
Market 'fear' Investors will now be focusing on US jobs data due out later on Friday as an indicator of the strength of the economy.
"Fear is the major theme," David Cohen of Action Economics told the BBC.
"People were cautiously optimistic that we would get back on track in the second half of the year. But with the US recovery stalling and the possible repercussions for the global economy, stock markets have been under pressure for a while."
The long-running political battle over the US budget also led to concerns that the US, the world's largest economy, would lose its AAA debt rating.
Market movements
The crisis has pushed markets into complicated territory.
On Tuesday, Germany - the biggest economy in Europe - saw its bond yield drop below the inflation rate for first time since reunification.
This suggests that investors are now so scared, they are willing to sacrifice a return on their investment to hold the least risky bonds in Europe.
And the Swiss franc and the Japanese yen have surged so much that both countries have intervened to slow the spikes in currencies.
Oil prices continued to fall, as fears of a global economic slowdown hit prices of commodities.
The prices of both US and Brent crude have fallen by more than 10% this week. Benchmark light sweet crude reached the lowest price since November last year.
On Thursday in the US, the Dow Jones index had its worst day since December 2008, closing down 512.76 points, or 4.3%, at 11,383.68.
Wall Street's other leading indexes also slid, with the S&P 500 index falling 4.8% and the tech-heavy Nasdaq more than 5% lower.

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