Growing fears of a military conflict between Russia and Ukraine sent shares lower on Europe's bourses and pushed the euro to a nine-month low against the dollar.
Market jitters increased markedly after the Polish prime minister, Donald Tusk, warned that the threat of direct intervention by Russia had increased in recent days and the announcement by the Kremlin that it would impose tit-for-tat sanctions against the west.
Amid concerns that the four-year crisis in the eurozone could be entering a new phase, Germany reported a hefty drop in industrial orders occurring even before the latest bout of tensions between Moscow and Kiev.
Meanwhile, the single currency's third-biggest economy – Italy – reported it had fallen back into recession after two quarters of falling output. In London, the FTSE 100 index was down by more than 90 points at 6589.5 by mid-morning – a drop of 1.4%. Shares were down by more than 1% in Paris and Frankfurt, and by more than 2% in Milan.
"We have reasons to suspect – we have been receiving such information in the last several hours – that the risk of a direct intervention [by Russia's military in Ukraine] is for sure higher than it was several days ago," Tusk said.
Oil prices were also under downward pressure as analysts contemplated a worsening situation in Ukraine following the shooting down of Malaysian jet MH17 leading to a fresh slowdown in Europe's already fragile recovery.
"We are getting closer to a situation where we really have an escalation of the conflict ... sanctions being stepped up, and things moving out of control," said Elwin de Groot, senior market economist at Rabobank. German industrial orders fell by 3.2% in June and were down 4.3% on the year, according to official data released in Berlin.
The weakness was caused by a drop of more than 10% in orders to other members of the 18-nation eurozone rather than to Russia, which accounts for about 3% of German exports.
Italy, by far the worst-performing economy in the G7 group of leading industrial nations since the financial crisis, said GDP contracted by 0.2% in the second quarter of 2014 following a 0.1% fall in the first quarter.
theguardian.com
Market jitters increased markedly after the Polish prime minister, Donald Tusk, warned that the threat of direct intervention by Russia had increased in recent days and the announcement by the Kremlin that it would impose tit-for-tat sanctions against the west.
Amid concerns that the four-year crisis in the eurozone could be entering a new phase, Germany reported a hefty drop in industrial orders occurring even before the latest bout of tensions between Moscow and Kiev.
Meanwhile, the single currency's third-biggest economy – Italy – reported it had fallen back into recession after two quarters of falling output. In London, the FTSE 100 index was down by more than 90 points at 6589.5 by mid-morning – a drop of 1.4%. Shares were down by more than 1% in Paris and Frankfurt, and by more than 2% in Milan.
"We have reasons to suspect – we have been receiving such information in the last several hours – that the risk of a direct intervention [by Russia's military in Ukraine] is for sure higher than it was several days ago," Tusk said.
Oil prices were also under downward pressure as analysts contemplated a worsening situation in Ukraine following the shooting down of Malaysian jet MH17 leading to a fresh slowdown in Europe's already fragile recovery.
"We are getting closer to a situation where we really have an escalation of the conflict ... sanctions being stepped up, and things moving out of control," said Elwin de Groot, senior market economist at Rabobank. German industrial orders fell by 3.2% in June and were down 4.3% on the year, according to official data released in Berlin.
The weakness was caused by a drop of more than 10% in orders to other members of the 18-nation eurozone rather than to Russia, which accounts for about 3% of German exports.
Italy, by far the worst-performing economy in the G7 group of leading industrial nations since the financial crisis, said GDP contracted by 0.2% in the second quarter of 2014 following a 0.1% fall in the first quarter.
theguardian.com
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