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Global markets turn negative on rumour of ECB resignation

Global markets have turned sharply lower as a number of rumours sweep round the dealing rooms.

Traders heard that board member Juergen Stark was stepping down from the European Central Bank amid talk of conflict over its controversial bond buying programme. A series of “no comments” to Reuters from senior officials is only serving to fan the flames. Further signs of disharmony in Europe as it struggles to sort out the sovereign debt crisis – most immediately in Greece and Italy – has sent investors rushing for the exits.

Wall Street is down more than 200 points in less than 10 minutes, the FTSE 100 is now down 112.57 points at 5227.81, the Dax and Cac are down nearly 3% and Italy’s FTSE MIB is off 4%.

The euro is also on the slide, down to below .37 at one point. The mood is not helped by unsubstantiated talk of a Greek default, possibly this weekend. With the G7 meeting at the moment, it’s not clear that is a credible tale but in a febrile market, every bad news story is seized upon.

Banks were among the hardest hit, on worries about their exposure to Greece and other European debt. Royal Bank of Scotland has lost 1.86p to 20.88p while Barclays is 13p lower at 146p, both declines of more than 8%. © 2011 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds