European markets pause for breath

European indices have opened flat in early trading as markets pause for breath after posting losses of over 2% this week, hit by contagion fears across the Continent.

However, with the euro hitting a four-month low against the dollar and Italy's main share index falling as much as 4% at one point yesterday, volatility look set to continue. The euro has recovered in early trading and is up 0.52% against the dollar to €1.40. Moody's downgrade of Ireland's credit rating to junk status will heighten fears the debt crisis in the eurozone could spread to Italy and Spain. The FTSE 100 has opened slightly up, 0.15% or 8.83 points to 5,878. Investors have turned their attentions to banks after a turbulent session for the sector yesterday over worries ...