European shares down after sharp falls in Asia

London's FTSE share index and Frankfurt's Dax index rose at first before falling back sharply.

The FTSE 100 index is down 4.1%, the Dax is down 5.7% and France's Cac is down by 2.4%.

Traders remain on edge after a severe loss of confidence caused by a downgrading of US debt and further strife in the eurozone.

Despite that, the yield on both Spanish and Italian government bonds fell further.

The European Central Bank (ECB) is intervening in the markets to try to keep the cost of borrowing down for the two countries, which are struggling to avoid a Greece-style bail-out by the authorities.

Worries about the level of US debt caused its credit rating to be downgraded from the top triple A grade - a move that lead to severe falls on Monday of between 3%-5% for European share markets and a 5.6% fall for the US Dow Jones index - its biggest in three years.

On Tuesday, Asian markets suffered their second day of steep falls, although they had recovered around half of their overnight losses by the close.

The Nikkei finished down 1.7%, South Korea's Kospi down 3.64%, and Hong Kong's Hang Seng down 2.8%.

See http://www.bbc.co.uk/ for full story.