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		</div><p><a href="http://londonglossy.com/wp-content/uploads/2011/02/stocks-tumble-amid-libya-oil-fears.jpg"><img class="alignnone size-full" title="The unrest in Libya is sending shockwaves through world markets" src="http://londonglossy.com/wp-content/uploads/2011/02/min-stocks-tumble-amid-libya-oil-fears.jpg" alt="The unrest in Libya is sending shockwaves through world markets"/></a></p>
<p>Violent clashes in Libya have sent world stocks tumbling deeper into the red as the price of oil remained near two-and-a-half-year highs.</p>
<p>Sharp falls across Asian markets sparked a sell-off in London and Europe, while Brent crude hit more than 108 US dollars (£67.50) a barrel on concerns that Libya&#8217;s crude exports of more than one million barrels a day could be affected as foreign oil companies evacuate staff from the country.</p>
<p>In London, the FTSE 100 Index sank more than 1% and France&#8217;s Cac 40 dropped nearly 2% as investors headed for the exit amid the escalating crisis in Libya.</p>
<p>Better-than-expected UK borrowing figures offered limited support to UK blue chips, despite news of a £3.7 billion surplus for Britain&#8217;s public finances in January thanks to a bumper tax haul.</p>
<p>Michael Hewson, market analyst at CMC Markets, said traders feared the Libya and wider Middle East unrest could send world markets into a prolonged tailspin. He said: &#8220;Given the fact that we have seen massive gains in stock markets over the last few months investors have been nervous about a possible correction for some time now.</p>
<p>&#8220;The tensions in the Middle East with Libya imploding and concerns that the unrest could spread to Saudi Arabia could provide just such a catalyst for a correction given that we are approaching some key support levels on the major indices.&#8221;</p>
<p>Surging oil prices also led to concerns that crude could break past its 2008 record of around 147 US dollars (£92) as the political unrest strikes right in the heart of some of the world&#8217;s biggest producing regions. Libya is the first leading oil-exporting country to be hit by the political turmoil, but traders were also eyeing protests in Iran, the second largest producer within Opec.</p>
<p>Airlines were among stocks hit hardest in London, under pressure from worries over the impact of rocketing fuel costs. Europe receives more than 85% of Libya&#8217;s crude exports &#8211; mainly for jet fuel &#8211; with 8.5% going to the UK.</p>
<p>There were also wider concerns on the rising oil prices, with experts suggesting a jump in energy costs could hurt consumer spending and knock the fragile global economic recovery.</p>
<p>The International Energy Agency&#8217;s chief economist Faith Birol reportedly warned oil prices posed a serious risk to recovery by weakening trade balances and putting pressure on central banks to raise interest rates and rein in inflation.</p>
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