European markets suffer big quarterly falls

Stocks in France and Germany have fallen in value by more than 25% since the end of June, while shares in London's FTSE are down close to 14%.

That would be the worst fall quarterly fall for the FTSE since 2002.

The latest falls follow an unexpected rise in eurozone inflation for September to 3%.

Investors had hoped the European Central Bank would move to lower interest rates in the eurozone, after raising them in July to 1.5% to limit inflation.

However, the latest inflation figures make such a move less likely.

Eurozone worries

But Friday's falls were just the latest bout of volatility in European markets, which have failed to regain ground since crashing at the start of July.

Economists say worries over the ability of eurozone countries to pay their debts are sparking concerns of a new banking and credit crisis.

"The euro-area debt crisis has potential ramifications to euro-area banking sectors in particular," said Grant Lewis, head of research at Daiwa capital markets.

"You've got concerns that a Greek default going wider into something more serious in terms of an Italian default, for example, that would leave banking sectors under-capitalised as well as having a calamitous effect on the economic outlook."

The share falls have therefore been most pronounced in eurozone countries, with the FTSE falling less than benchmark German and French exchanges; Kazinform cites BBC.

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