FTSE slumps into the red over Eurozone concerns

The FTSE 100 Index tested the 5,000 barrier at one stage before bouncing back but still closed 84.95 points lower at 5073.13 – adding a further 1.6 per cent slide to Wednesday's 2.8 per cent plunge, after Germany's surprise move to ban speculators from betting against the eurozone.

Figures showing a sharp fall in consumer confidence in the Eurozone as well as disappointing US data showing the biggest rise in jobless claims for three months added to the negative mood as Wall Street's Dow Jones Industrial Average fell by more than 2 per cent.

In the US, Fed Governor Daniel Tarullo said Europe's debt woes, if not contained, could cause financial markets to freeze and spark a global crisis akin to the market meltdown of late 2008.

Until last week, Fed officials had been playing down the possible impact to the United States from Europe's turmoil.

"The European sovereign debt problems are a potentially serious setback," Tarullo said in testimony prepared for deliver to two congressional subcommittees.

Germany's DAX and France's CAC 40 were off 2 per cent and 2.7 per cent respectively, while the euro fell back below 1.24 US dollars after an attempted rally earlier.

City Index market strategist Joshua Raymond said: "The markets are a whole mess of uncertainty and fear right now."

The pound was also under considerable pressure on currency markets, sinking to 1.43 dollars and falling beneath 1.16 against the single currency.

Gains among banks and oil stocks initially limited the damage, but the wide-ranging sell-off left all but a handful of firms in the red.

Power provider National Grid was the Footsie's biggest casualty after it revealed plans to tap shareholders for 3.2bn to speed up investment in its ageing infrastructure.

Shares in the energy firm sunk 7 per cent, or 431/2p to 5761/2p,

despite news of a 12 per cent rise in underlying annual profits.

Grolsch and Pilsner Urquell brewer SABMiller joined it on the fallers' board, down 123p to 1912p, after cautious comments on consumer spending overshadowed full-year results.

They were followed by a raft of mining stocks, led by Eurasian Natural Resources which shed 581/2p to 9341/2p.

Worries over a European slowdown and moves to cool the Chinese economy prompted a downgrade for UK miners from brokers at BoA/Merrill Lynch.

British Airways began the day ahead but declined 3 per cent, or 61/4p to close the day at 1861/2p, after trade union Unite won its appeal against an injunction banning the latest round of strikes.

Industrial action is most likely to start on Monday.

In the second tier, Mothercare was down 4 per cent, or 22p to 525p, as the babycare retailer lost ground on its cautious outlook for the UK market despite better international prospects.

But cash and carry firm Booker was on the rise, up 3 per cent, or 1.15p to 40.35p, after reporting a 21 per cent rise in annual profits.

Directories firm Yell also managed to claw back some of its heavy falls seen on Wednesday after its two top bosses announced their departure.

The Yellow Pages publisher rose 10 per cent, up 3.35p to 37.05p, as it unveiled a deal to buy local reviews website Trusted Places.

The biggest Footsie risers were BP up 51/4p to 5283/4p, BT ahead 5/8p to 1265/8p, and Legal & General, which ended the day ahead 1/8p at 753/8p.

The biggest faller was National Grid.