Lloyds shares bounced back this morning after suffering sharp losses yesterday.
Markets fell amid fears about the eurozone crisis and Asian stocks plummeted following growing tensions between North and South Korea.
The FTSE 100 dropped below 5000, its lowest since September 2009 and Lloyds shares crashed by nine per cent, Royal Bank of Scotland and Barclays shares also both fell by almost six per cent.
However, they both bounced back this morning with the FTSE 100 creeping back up above the 5000 mark and Lloyds Banking Group advanced 4.5 per cent, following a slight recovery in the Asian markets over night.
But the situation looks set to worsen with investors reluctant to commit themselves heading into a long bank holiday weekend and the half term holiday. There are also concerns about Spain's banking sector and economy and the potential knock-on effects on the UK.
Speaking to The Guardian Owen Ireland at ODL Securities said: “After yesterday's dramatic falls, a semblance of calm has returned. One can't hide the fact though that there is an underlying fragility to markets – whilst the rallies are smaller than the falls, there may be a reluctance to pile monies in to the markets.”
Following the tension in the markets the Organisation for Economic Co-operation and Development (OECD) has urged economic solidarity.
"This is a critical time for the world economy," said OECD Secretary-General Angel Gurría. "Coordinated international efforts prevented the recession from becoming more severe but we continue to face huge challenges.
“Many OECD countries need to reconcile support to a still fragile recovery with the need to move to a more sustainable fiscal path. We also need to take into account the international spill-overs of domestic policies. Now more than ever, we need to maintain co-operation at an international level."
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