Eurozone

Portugal's constitutional court has ruled against the country's planned austerity programme, putting its £78bn bailout package in jeopardy and creating a fresh crisis for the eurozone.

Institutional investors are likely to keep their cash in fixed interest this year and may even top up their holdings, despite talk of a shift into equities, said HSBC Global Asset Management's product specialist, fixed income, Brian Dunnett.

Japan's Nikkei index experienced its biggest fall since November as concerns about Cyprus and the eurozone continued to batter markets.

European markets ended Tuesday lower as concerns over Cyprus and uncertainty over the European debt crisis weighed on investor confidence.

Asian markets tumbled overnight and safe-haven bond yields fell following news EU member Cyprus is to impose an unprecedented bank levy on deposits held in the country.

European bond and stock markets saw a sharp sell-off on Monday after a shock result from the Italian election, where no political group managed to win a majority vote.

MID CAPS

Britain risks seeing its standard of living hit if it leaves the European Union, according to the head of the firm running the world's largest bond fund.

Germany's AAA credit rating will come under increasing scrutiny this year as investors shift their focus, according to Cosimo Marasciulo, head of government bonds and FX at Pioneer Investments.

HSBC says sterling will weaken this year as it faces a "triple cocktail" of potentially destructive factors from China, the US and the eurozone.