Euro markets plunge on recovery fears

The FTSE 100 was down more than 1.3% in early afternoon trading as weak data from China and ongoing fears for the US economy hit risk assets.

London's leading index extended earlier losses, with shares down 1.4% at 5,661 points shortly after 1.30pm. European markets were also hit, with the French CAC40 down 1.7% and the German Dax slipping 1.4% lower. Investor sentiment was hit in the wake of the US Federal Reserve's move to cut growth forecasts for 2011 by as much as 0.6% - to 2.7%. Adding to fears for the global recovery was weaker-than-expected data from China, which showed factory-sector growth was close to stalling in June, leaving little incentive for investors to buy equities. Meanwhile, Europe ministers are lo...