Worldwide Market bend on Eurozone debt horror

Worldwide shares have crashed so quickly for the second day as worries about the Eurozone debt crisis deepen.

New York's Dow Jones index dropped over 3% in initial trading, while Frankfurt's Dax and London's FTSE 100 indexes go down about 3.5%.

Jose Manuel Barroso, President European Commission has warned that the sovereign debt disaster is scattering spooked the markets.

In the mean time, the price of gold triggered a fresh record high of $1,677 an ounce.

Several weak jobs data from the US also enhanced fears about the potency of the economic recovery there.

Banks were hit especially hard, with Lloyds Banking Group down 9.9% and Royal Bank of Scotland going down 7% in London, Societe Generale downing 6.9% in Paris and Commerzbank falling 6.8% in Frankfurt.

Miners also undergone, with Vedanta Resources sprawling 9.5% and Xstrata and Eurasian Natural Resources dropping over 8% in London.

The oil price also sprawled on worries that a meager worldwide recovery would hit demand. US light crude drop by above $4 a barrel, or almost 5%, to $87.63. London Brent drop by about $5 a barrel to $108.85.

Mr Barroso, in a letter to European governments, warned that the eurozone debt disaster was scattering beyond the alleged border nations of Greece, Portugal and the Republic of Ireland.

He said markets "linger to be persuaded that we are taking proper steps to solve the crisis".

He requested on them to give their "complete supporting, to the euro, and advise leaders to take prompt action to apply the changes to the European Financial Stability Fund (EFSF) decided at last month's summit of eurozone leaders.

The EFSF is basically Europe's save fund, which leaders decided should be able to buy government debt in "outstanding financial market conditions".

Reports advised that the European Central Bank (ECB) had already started buying government bonds to provide support countries with top borrowing costs.

At a press conference to declare the bank was keeping eurozone rates on hold at 1.5%, ECB President Jean-Claude Trichet solely said the procedure of buying bonds was "continuing" and fully transparent.

Mr. Trichet's and Mr Barroso's remarks came as worries raised that Spain and Italy may be hauled into the debt disaster.

On Thursday, the interest rate, or give up, that Spain had to consent to pay to move up 2.2bn euros ($3.1bn; £1.9bn) for three years rose quickly to 4.8% from 4% at a same bond public sale in early June.

This reproduces sharp fears about Spain's capability to reimburse its debts.

Spain also said it had poised a bond sale due for 18 August.

However, market analysts said demand for Thursday's bond issue was strong and in spite of the increase in rates, recommended 4.8% was a sustainable rate of interest for Madrid to pay.

Surrenders in the secondary market, on Italian government bonds in addition to Spanish, did not move drastically advanced in spite of the public sale.

In Italy, Prime Minister Silvio Berlusconi continued his efforts to cool the markets, which started with a speech on the economy to parliament on Wednesday.

Mr. Berlusconi met union leaders and employers' agents, and vowed number of actions to try to build confidence in the Italian economy.