European markets slump as earthquake hits Spain

Markets across Europe fell at the start of trading as an earthquake measuring 5.1 on the Richter scale hit Spain and commodities were heavily sold off in the US.

The earthquake damaged the Spanish town of Lorca, killing eight people and destroying buildings and cars.

The French Cac 40 index dropped by 1.15% to 4,012 and the German Dax fell 0.93% to 7,422 this morning.

In London, the FTSE 100 also opened lower, falling 0.6% or 36 points to 5,939 in early trading.

A downbeat session in the US and Asia overnight and a heavy sell-off in energy and metals also contibuted to the slump in Europe.

The S&P 500 closed down 1.1% to 1,342.08, the worst one-day drop in the index in nearly two months.

Investor sentiment was adversely affected by news the US trade deficit had soared 6% to $48.2bn in March as higher energy costs countered a promising jump in exports, the FT reports.

The energy and material sectors which saw the steepest losses in the session, reacting to the latest fall in commodity prices.

A sharp drop in oil prices left the S&P energy sector with the worst losses, down 3% and adding to the 3% losses already seen this month.