Markets rally back on hopes of end to Libya conflict

Share markets in Europe have rebounded, led by shares in energy firms, on hopes that fighting in Libya may soon end.

At close on Monday London's FTSE 100 raised  1.08% and the Cac 40 in Paris by 1.14%.Its a good sign for investors.

The rally follows a 5% to 10% slump on most markets on Thursday and Friday on recession fears in the US and Europe.

Oil prices initially down on hopes that Libyan crude would soon come back on tap, before rising again on greater optimism about the global economy.

Global stock markets slump on eurozone debt fears

Globally shares have dropped sharply for the second day as fears about the eurozone debt crisis intensified.

New York's Dow Jones index was trading more than 3% down, while Frankfurt's Dax and London's FTSE 100 indexes closed almost 3.5% lower.

European Commission President Jose Manuel Barroso's warning that the sovereign debt crisis is spreading spooked the markets.

On the side, the price of gold hit a new record in history high of $1,677 an ounce.

More weak jobs data from the US also raised concerns about the strength of the economic recovery there.

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

Miners also suffered, with Vedanta Resources slumping 9.5% and Xstrata and Eurasian Natural Resources falling more than 8% in London.

The oil price also dowm on fears that a weaker global recovery would hit demand. US light crude reduced by more than $4 a barrel, or almost 5%, to $87.63. London Brent fell by almost $5 a barrel to $108.85.

Investors differ over debt debate's stock impact

If the government doesn't get its act together with its debt limit, there's growing concern the stock market will react negatively

But highlighting just how unthinkable it would be for the U.S to default or have its credit rating downgraded, investors are threatened.

Most investors see any major setback in the creditworthiness of the U.S government, especially a lack of any agreement to avoid default, as a negative.

Financials and home builders were much effected during the stock market's woes in the credit crisis of 2008, there were areas that were hurt more than others.