A downgrade of Italy's credit rating by one of the major ratings agencies would come as "no surprise", according to Allianz Global Investors' chief investment officer Neil Dwane.

Germany's economy shrank by approximately 0.25% in the fourth quarter of last year, raising fears Europe's second largest economy is on the brink of recession.

Ten years on from the introduction of the euro, opinion is divided over whether the troubled single currency can survive another decade, especially in its present form.

The S&P 500 has risen 1.2% to 1,295, its highest level since 1 August, helping extend gains in the UK and Europe.

German chancellor Angela Merkel has said she cannot guarantee support of the controversial financial transaction tax - known as the Tobin tax - which threatens to create a rift between Germany and France days before a crucial European summit.

Asian markets were boosted overnight by speculation the Chinese government is poised to begin loosening its monetary policy in response to the impacts of the eurozone debt crisis.

Equity funds experienced their highest ever outflows of retail money in November as investors pulled out their cash in droves amid the ongoing eurozone crisis.

Dalton Strategic Partners fund manager Jenifer Rush adopts adventurous investment style to find ideas within the commodities sector.

Two of the UK's major tax-payer backed banks are facing three years of further writedowns, according to Barclays Capital analysts.

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