Markets drop as Italian bond yields hit new records

The FTSE 100 was down 1.7% at 5,434 in early trading as Greek prime minister George Papandreou looked set to stand down in the wake of the coalition agreement. Germany's Dax was down 1.7% at 5,867 while France's Cac 40 also fell 1.7% to 3,070 as Italy became the focal point of attention for investors. Italian 10-year bond yields moved 20 basis points higher to a record 6.56%, with the spread over German bunds also moving to a fresh euro-era record. The Nikkei 225 closed down 0.4% at 8,767 overnight in Asia, with Hong Kong's Hang Seng trading down 0.9% at 19,667 and the MSCI Asia Pa...