Spain

Investors in Europe are treading carefully today after some steep losses across equity markets so far this week, with Spain's pledge to support its banking system putting a stop to selling for now.

Spain has taken a 45% stake in Bankia, the country's third largest bank, following another day of sharp falls in the country's equity markets and gains in its bond yields.

The euro has fallen below the $1.30 barrier against the dollar, as Sunday's European election hangover continues to unsettle investors.

The FTSE 100 sunk through the 5,500 level today as political woe in the eurozone continues to cloud the outlook for the global economy.

Spain has unveiled plans to clean up its stricken banking sector in an attempt to prevent the economy from derailing.

Spain's economic malaise was confirmed this morning as GDP for the first quarter of the year showed a contraction of 0.3%.

ECONOMICS

Italy sold €5.95bn worth of bonds today after Standard & Poor's downgrade of Spain reignited fears over the health of European peripheral economies.

SPECIAL REPORT

Standard & Poor's(S&P) has cut Spain's credit rating two notches to BBB+ and warned of more economic pain to come.