The Australian and Asian Markets are pointed for weak start to the open after US stocks collapsed as a surge in Italian bond yields put the spotlight back on sovereign debt issues in the European area.
The Dow (see above chart) finished the overnight session down 389.24 points at 11780.94 while the S&P500 index fell 46.82 points to close at 1229.10.
US banks were the biggest losers as the market turned ruthlessly on Italy, raising fears about the third-largest economy in Europe and its ability to remain current on debt payments.
The EURUSD sank over 2 per cent from overnight highs of 1.3852 to recent lows of 1.3523 as Italian government borrowing costs accelerated toward unsustainable levels.
Spot Gold fell from highs of above 1,800 an ounce overnight as investors continue to show concern about the financial health of Italy turned to the U.S. dollar for safety.
WTI crude settled down over 1 per cent at USD95.74 a barrel on mounting fears over Italy's debt crisis. Interestingly it is still near lows even after news that inventories sank across the board in the United States.
The volatility index which is one of the best indicators of fear jumped over 31 per cent to close at one month highs of 36.16.
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Bloomberg, Dow Jones News