European markets saw confidence ebb away this morning as continuing wrangling over the Eurozone bailout fund took its toll.
Optimism had been growing that the weekend meeting of European Union leaders in Brussels would come up with a substantial plan for dealing with the debt crisis, primarily through ramping up the bloc's bailout mechanism, the EFSF.
But French President Nicolas Sarkozy admitted that plans to tackle the crisis had stalled with Paris and Berlin at odds over how to increase the bailout fund.
The FTSEurofirst 300 index of top European shares was down 1.2 per cent on opening today, with banks edging down over continuing uncertainty over how stringent their capital requirements will be.
But mining stocks were among the biggest fallers in London with fears that storm clouds were gathering over China whose rapid growth has slowed.
A poll suggesting that the economy - the engine room of global recovery - would cool next year added to the bleak outlook.
Kazakhmys and Rio Tinto were both down more than three per cent. Anglo American nudged down by 1.3 per cent while Rio Tinto dropped 2.5 per cent.
But the company which took the biggest hit was safety testing expert Intertek which was 3.5 per cent off.
Security giant G4S, which earlier in the week announced a £5bn deal to buy a Danish rival, was down by 3.3 per cent.
The other significant loser was outsourcer Capita which fell by three per cent.
Banks were also dented by the lack of progress on a Eurozone debt deal with Lloyds down by 1.4 per cent, Barclays 1.5 per cent and RBS 0.5 per cent.
On the up side iPhone chipmaker Arm Holdings was the top riser, lifting 1.5 per cent. Meanwhile BSkyB continued to gain after posting strong results and was 1.2 per cent higher.
National Grid and United Utilities also saw slim rises.
On the FTSE All-share Punch Taverns was up 1.7 per cent as investors reacted positively to its debt pile reducing despite hefty losses. Spirit, from which Punch was demerged, was up 3.7 per cent after its profits rose.
In Asia the Nikkei closed down 1.03 per cent while the Hang Seng dropped 1.78 per cent.
Lifting some gloom from the UK retail sector, sales grew more than expected in September after a surprise increase in purchases of laptops and video games.
Meanwhile across the Atlantic the latest US weekly jobless claims are due for release.