Markets dip as investors await latest EU summit

The FTSE 100 is down 1.2% and US markets have also opened lower as investors’ hopes for a positive outcome from Friday’s EU summit begin to dwindle.

The UK's blue chip index lost further ground this afternoon once the US opened, dropping 69 points to 5,500.

Broker ICAP was the largest faller, dropping 6% after a Morgan Stanley downgrade and news broking volumes on the BrokerTec and EBS platforms fell 7% year-on-year in November. Gold miner Randgold was the biggest climber, rising 2.5%.

In the US, the S&P 500 was down 0.7% to 1,249, with the Dow Jones Industrial Average dropping 0.4% to 12,105. France's Cac 40 was down 0.7% to 3,156, with Germany's Dax falling 1% to 5,969.

EU policymakers meet in Brussels on Friday for the latest crucial summit in their attempts to formulate a long-term solution to the sovereign debt crisis.

Key sovereign bond yields moved slightly higher: Italian 10-years yielding 6.5% and Spanish 10-years yielding 5.5%. In Germany, 10-year bunds were yielding 2.1%.