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European financial markets tumble

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The European financial markets took a nosedive overnight, exacerbating earlier losses as traders hesitated due to concerns about the Dubai crisis and another credit downgrade for Greece. "It is apparent that Dubai's issues are not yet properly assessed, let alone dealt with," said David Morrison, analyst with trading firm GFT. "On top of this, Greece's credit downgrade brings other eurozone countries back into focus - Ireland and Spain - which has pressured the euro." European banking shares slid overnight as markets fretted about the sector's exposure to Dubai. At the same time, Greece was hit by a second blow to its credit rating overnight, marking falling confidence in its economic policy, and raising the prospect of crisis budget measures and increasing strains in the eurozone. Credit rating agency Fitch downgraded Greek long-term debt ratings, hours after Standard & Poor's warned it could take the same step if the new government did not take aggressive action to slash the huge public deficit. Morrison said traders were running for cover due to "concerns of a sovereign debt default".

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