Markets turn red as US disappoints and Moody's downgrades Greece

Woeful economic data in the US and a three notch downgrade of Greece's credit rating saw global markets tumble overnight.

At London opening the FTSE index of 100 leading shares was down 1.03% at 5,867.79.

Overnight, major indices including the S&P 500 and Nikkei 225 dived sharply after US jobs data missed the mark.

An estimate by ADP, the payroll processor, that the US private sector created just 38,000 new jobs in May fell well below a forecast gain of 175,000, hurting sentiment.

The disappointing jobs data coincided with a manufacturing survey which showed a 19-month low in production and a drop-off in car sales, sending the S&P 500 down 2.3% to close at 1,315 points.

Meanwhile in Asia markets were hit by signs of US weakness, prompting a similar sell-off.

The Nikkei 225 closed down 1.7% at 9,555, while the Shanghai Composite was down 2% at 2,689.

A downgrade of Greece's credit rating by Moody's from B1 to Caa1 added further pain, after the ratings agency hit out at plans to rollover the country's debt pile.

Moody's said it was concerned about Greece's growth prospects, while adding it looked unlikely to stabilise its debt ratios.

The FTSE 100 which dropped more than 1% Wednesday to close at 5,929 points, was poised to make further losses in early trading.