FTSE tumbles 100 points as Italy bond yields hit danger levels

The FTSE 100 dropped sharply mid-morning as investors fretted over the future of Italy following a spike in the country's bond yields to record levels.

Despite the news Italian prime minister Silvio Berlusconi is poised to resign,investors sold stocks across the continent as Italian bond yields spiked to record highs above the crucial 7% level. The jump to 7.4% this morning put pressure on stocks as investors fretted Italy could end up in a similar situation to Greece. Shares plunged in response, with the FTSE 100 down 1.6% or 96.54 points, at 5,470. In Europe shares also retreated, with the German Dax down 1.9% at 5,850, and the French Cac 40 off by the same amount at 3,082.6 points. Last night Berlusconi pledged to step down ...