Banking stocks were fighting back after sharp falls in the previous two sessions amid fears of an impending crisis as investors fretted over the sector’s ability to withstand slower global growth.
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The German DAX, the CAC in Paris and Spanish IBEX were all down more than 3%.
The yen and Swiss franc, often sought in times of financial market turmoil, have also received strong boosts this week.
Shares jumped 82.5p to 527.5p. Falling banking shares accounted for a fifth of the fall in the FTSE 100. It has lost almost 10% since the start of this year.
In Britain, the biggest banks have seen more than £40billion wiped off their value since the start of the year, in a major blow for investors and pension savers.
Analysts said the sector was prone to further weakness in the near term. At that time, investors were penalized on the Greek government debt.
Traders hurry across the floor of the NYSE as low stocks put the market on track for its second sizeable loss in a row. The shares are down nearly 20% this year.
Holiday operator TUI Group saw its shares fall 31p to 1067p, as it said holidaymakers shunned Turkey in the face of terrorist attacks and continued fighting in Syria.
And there was more bad news for the nation’s savers after experts warned interest rates – which have remained at record lows of 0.5 per cent since March 2009 – would not rise for another four years. Worries over a possible British vote to leave the European Union later this year were also weighing. “The market has reached levels where there are buyers wanting to come in, but the global climate is just so challenging that people are still afraid”. “But simultaneous independent efforts to depreciate could result in an undesirable “race to the bottom” among central banks”.
At 9:36 a.m. ET, the Dow Jones industrial average.DJI was up 56.77 points, or 0.35 percent, at 16,071.15.
The tech-dominated Nasdaq index was down by more than 2%, with shares in Facebook, Google and Amazon all down sharply.
Brent crude, the global benchmark, rose 73 cents to $31.05 a barrel, though prices were expected to stay volatile.
She said: “Markets are telling us that banks from all over the world – highly sensitive to economic conditions – are in trouble”.
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Banking stocks took a hefty hit in the FTSE as fears intensified that a slowdown in the Chinese market, the falling price of oil and rock-bottom interest rates could steer the sector towards another meltdown. “The banks are getting hit hard”, said Richard Griffiths, associate director at Berkeley Futures.
