The FTSE 100 opened lower this morning despite recent positive economic data, as rumours of a Fitch downgrade of Italy weighed on markets.
With volatility set to dominate again this year, experts predict which sector or geographical region will surprise on the upside.
The FTSE 100 has extended losses as concerns over eurozone banks' need for more capital hit sentiment across the continent.
The FTSE 100 closed at its highest level for over two months last night as world markets soared on the first day of trading in 2012.
The FTSE 100 is trading 1% higher at 5,628 after closing 2011 down 5.5% for the year at the end of last week.
Asian shares fell into bear market territory for the year overnight, while commodities and the euro suffered heavy falls on renewed eurozone fears.
London's leading share index has made a subdued opening in early trading, with investors returning cautiously to stocks after yesterday's sell-off.
The FTSE 100 sold-off in early trading as optimism over the EU's latest deal to tackle the crisis faded and investors dumped risk assets.