FTSE falls another 1% on Euro and US worries, heading for 11 month low - The Guardian (blog)

The global sell-off in shares has started in earnest again, with the FTSE 100 down more than 1% after an early rally fizzled out almost immediately.

Ahead of the European Central Bank's latest comments on interest rates - which will be widely watched for Jean Claude Trichet's view of the Eurozone crisis and whether the ECB will buy bonds to support the market - the UK's leading index is down 64.27 points at 5520.24. So far this week the FTSE 100 has lost nearly 300 points and is on course for its lowest close since the middle of September.

Meanwhile Spain's Ibex is down 0.2%, Portugal is off 1.2%, and Italy 1.5% lower. The Dow Industrial Average is forecast to open 99 points lower when Wall Street opens.

As well as the Eurozone crisis - with no solution seemingly in sight - investors are increasingly worried about a global economic slowdown, as evidenced by poor manufacturing and service sector figures from the US. On Friday come the US non-farm payroll numbers which could lead to yet more volatility. Joshua Raymond, market strategist at City Index said:

The initial bounce back in UK equities this morning after the sharp losses of the week was short lived, with the heavyweight mining and oil sectors continuing to weigh on the FTSE 100.

The sharp falls for the FTSE 100 is a big concern going into tomorrow's non-farm payrolls figure. The 5500 mark is increasingly being seen as a downside target whereby the UK index may see support. One however fears that having seen such a strong flight away from risk this week, what the market reaction could be if we get another set of bad non-farm payroll numbers tomorrow. If tomorrow's figures miss expectations of a rise of 85,000, this would be the third consecutive month it would have done so.

Disappointing results from Rio Tinto have helped push down the mining sector - already under pressure on concerns about slowing demand. Rio is off 153.5p at 3861.5p while Xstrata is down 62.5p at 1123.5p.

Banks are also weaker on worries about their exposure to Eurozone debt. Lloyds Banking Group is down 2.54p at 36.42p despite what initially appeared to be reasonable looking figures.