Markets

Markets around the world closed down overnight as further signs European leaders will fail to agree a new treaty emerged.

If Greece leaves the euro, banks across the Continent will suffer "horrifying" consequences, with a run on banks worse than anything seen before, said M&G's bond star Jim Leaviss.

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.

After a momentous year for government debt, during which it far outstripped the majority of asset classes, managers have moved to take profits from positions in several major debt markets.

Actions taken by the European Central Bank this week, combined with the EU's efforts to sign a new treaty, have made it too risky to be underweight bank bonds in Europe, Kames Capital's fixed income team has said.

Asian markets rallied overnight as Moody's mulled raising the ratings of some Asian countries, while investors pinned their hopes on an EU summit to solve the debt crisis.

European stock markets opened higher this morning ahead of a crucial eurozone meeting on Friday which could decide the future of the single currency.

German Chancellor Angela Merkel helped lift markets further today after revealing moves towards "fiscal union" in Europe were afoot.

The FTSE 100 has reversed this morning's losses to rise over 1% in afternoon trading - buoyed by a surge on Wall Street.

The FTSE 100 has seen its longest losing streak in eight years as investors continue to sell-off shares amid fears over the state of the eurozone.