Burberry drops 6% on China worries as Greek deficit miss spooks markets

News that Greece would miss its deficit targets cast further doubt on its ability to negotiate successfully through the current crisis, and sent markets sharply lower. Ahead of a key Eurogroup meeting in Luxembourg – and ahead of UK PMI figures, the FTSE 100 has fallen 116.44 points to 5012.04, although it has come off its worst levels. Jonathan Bristow at Valbury Capital said:

Luxembourg seemed such a quiet place, but after today’s meetings it could be the origin of some pretty big noises if the bailout doesn’t go through. This week will be a confidence test in the markets as with the Greek situation on the table and last week’s US financials indicating a further slowdown very few people will be confident with the positions they start with.

Banks are unwanted as investors try to guage the extent of their exposure to Greece if the country defaults, with the news of a downgrade to Belgian bank Dexia only adding to the concerns. So Barclays is down 9.5p at 151.85p, Royal Bank of Scotland is off 1.24p at 22.25p and Standard Chartered – also facing the problem of a slowdown in the Far East – is 61p lower at £12.26.

With gold regaining some of its safe haven status and heading higher again, the only two risers in the leading index are precious metal mining groups. Randgold Resources is up 110p at £64 and Fresnillo has climbed 12p to £15.98.