Equity markets across Europe are down sharply this morning following a savage sell off in Asia. The FTSE 100 is now trading at a three and a half year low, whilst the German DAX has fallen to a 16 month low.

The Hang Seng slumped 3.9% overnight as equity markets reopened following the Chinese New Year.

Banks shares are leading the downturn with Deutsche Bank falling -8%, Barclays -5.75%, -Lloyds 2.89% and the Royal Bank of Scotland -3.75%.

Markets are concerned over the health of the banking system following Janet Yellen’s comments that the global economy is faltering. The global markets have also come to the conclusion that the Fed will be unable to raise interest rates in the face of global recession.

The gold price has surged to £850 per ounce to a 12 month high as investors seek a safe haven. The silver price has spiked to £10.76 per ounce and is closing in on a 12 month high.