FTSE slump continues as Germany digs in

THE FTSE 100 continued to fall this morning as Germany's refusal to agree to a common Eurozone bond to shore up the bloc's finances further drained investor confidence.

London's blue chip index posted its ninth successive day of falls yesterday and has dropped 7.5 per cent in the period - the longest losing streak since 2003.

With Germany also refusing any European Central bank (ECB) funded quantitative easing ideas for solving the Eurozone debt crisis are running out according to economists.

Meanwhile the ECB is likely to cut interest rates further if current economic trends continue, governing council member Luc Coene said.

In another blow to market sentiment Moody's today cut its rating of Hungarian government debt to junk status.

The ratings agency blamed Hungary's high levels of debt and weak prospects for growth.

Miners were the weakest link on the FTSE 100 with fears of stuttering global growth - held back partly by the Eurozone crisis - taking their toll.

Antofagasta, BHP Billiton, Vedanta and Rio Tinto were all down more than one per cent and were four of the five biggest losers on the index in early trading.

But water company Severn Trent was the biggest faller, down 3.2 per cent after it said in a trading update first half profits had fallen.

In the banking sector Lloyds edged down by 0.2 per cent and Barclays 0.1 per cent. RBS gained 0.7 per cent.

Meanwhile AIM listed investment bank Shore Capital was down 6.3 per cent after saying it may make a loss in the full year.

There were few significant gainers on the FTSE 100, with catering giant Compass up 0.6 per cent and interdealer broker Icap 1.4 per cent.

Retailer Morrison nudged up by 0.3 per cent and National Grid 0.2 per cent.

In Japan the Nikkei closed down 0.06 per cent and the Hang Seng 1.7 per cent.