FTSE falls further 1% as Greece fallout continues

The FTSE plunged a further 50 points in early trade Wednesday as the fallout following Standard & Poor's (S&P's) downgrading of Greece's debt to ‘junk' status continues.

After posting its largest one-day fall in five months yesterday to close more than 2.6% down, the index has now dropped another 50.8 points, or 0.91%, to 5,552.72.

Global shares tumbled Tuesday after credit ratings agency S&P downgraded Greece's long and short-term sovereign credit ratings to BB+ and B respectively, from BBB+ and A-2. Greek regulators have since announced a ban on short-selling on Greece's stock market.

The moves hit US and European markets. On Wall Street, the Dow Jones closed Tuesday down 213 points, or 1.9%, at 10,991.99.

On the FTSE, banking giants RBS and Lloyds Banking Group dropped 7.7% and 7.3% respectively. RBS chiefs will reportedly face opposition from shareholders who want executive pay incentives linked to tougher targets at its upcoming AGM.

RBS shares have dropped to 51.7p while Lloyds has slumped to 63.15p. Barclays also fell, by 4% to 342.6p.

Japanese stocks fell the most in 12 weeks as panic spread following the Greek downgrade.

The Nikkei 225 Stock Average fell 2.6% to close at 10,924.79 in Tokyo, the biggest drop among benchmarks in the Asia-Pacific region. The broader Topix index lost 2% to 977.64.