Markets tumble as Greek bail-out concerns continue

The Footsie fell 2.6 per cent, down 142.18 points to 5411.11, while indices across Europe also plunged – by as much as 3.6 per cent on the Cac 40 in France.

America's Dow Jones Industrial Average dropped by 2 per cent, falling below the 11,000 mark amid concerns the 110 billion euro (95bn) Greek rescue package will not be enough and that turmoil will spread to other European countries.

Meanwhile, concerns over the impact of the Gulf of Mexico oil spill inflicted more damage on BP shares and news of Australian tax hikes on mining projects hit the heavyweight mining sector.

The euro fell to a year low against the dollar as worries lingered over the Greek fall-out on the eurozone.

The pound strengthened to 1.16 against the single currency but fell to 1.51 against the safe-haven dollar.

In the US, pending sales of previously owned homes hit a five-month high in March as buyers rushed to sign contracts before a tax credit expired, while a jump in factory orders pointed to manufacturing strength.

The data further confirmed the economic recovery was gaining more muscle.

The National Association of Realtors (NAR) said its Pending Home Sales Index, based on contracts signed in March, increased 5.3 per cent to 102.9, building on the prior month's revised rise of 8.3 per cent.

BP – which has just begun work on a new well to seal off the leak – saw shares tumble 17p to 5581/2p, or 3 per cent. The drilling is likely to take some three months, while the spill is costing it around 6 million dollars (3.9m) a day.

The oil giant was joined on the fallers' board by a host of miners on news of a new 40 per cent super-tax from the Australian government, as well as fears over a slowdown in China. Eurasian Natural Resources was the biggest casualty, with shares down more than 11 per cent, or 139p to 1087p.

British Airways was another faller after the return of the volcanic ash cloud from Iceland, which closed airspace over Northern Ireland and parts of Scotland yesterday. Shares lost 12p to 2161/4p.

Security firm G4S gained ground on a slow day for corporate news although its advance was slowed by the wider sell-off. Shares were up 3.6p to 271p as it reported a "robust" first quarter.

Other firms on the front foot included blue-chip software company Sage, which added 1/2p to 2453/4p ahead of first-half results expected to show a 4 per cent rise in profits. Morgan Stanley raised its target price on the company ahead of the figures.

Asian-facing bank Standard Chartered, meanwhile, edged 221/4p lower to 1736p after gains earlier amid a "very strong" start to 2010 and profits ahead of last year.

But in the FTSE 250, news of a sharp slowdown in net mortgage lending – down 83 per cent to 318m during March – weighed on several housebuilders amid worries over loan availability.

Among the fallers were Persimmon, off 183/4p to 4573/4p, Taylor Wimpey down 17/8p to close at 383/4p and Barratt Developments, which was 51/4p cheaper at 1191/2p.

Heading in the opposite direction in the second tier was Aberdeen Asset Management, which rose 51/4p to 1433/8p after reporting underlying profits of 92.6m in the six months to March 31 – almost treble the previous year.

The biggest Footsie risers were Inmarsat ahead 161/2p to 780p, British American Tobacco ahead 39p to 20931/2p, Capita up 103/4p to 810p and G4S.

The biggest faller was ENR.