Bond yields spike and markets fall after euro deal

Markets across Europe sold off in early trading, while bond yields in core European countries rocketed towards danger levels, after investors failed to be convinced by an overnight deal to save the eurozone.

Shares across the board were in the red in early trading, with the FTSE 100 down 0.7% at 5,445.9 points, as investors considered the move by the UK to reject the latest EU deal. Attempts to get all 27 EU states to approve a new deal failed during overnight talks in Brussels. French leader Nicolas Sarkozy said the 17 eurozone states and other EU members would work on a separate pact instead, in a bid to restore the credibility of the euro. The UK and Hungary will play no part in a new inter-governmental treaty, while Sweden and the Czech Republic will consult their parliaments before m...