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03:37 GMT +3 hours22 December 2014
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Europe Markets Choke as Greece and Spain Flounder

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European stock markets fell sharply on Wednesday as protesters took to the streets in Greece in a general strike, Spanish bond yields hit 6 percent over austerity protests and wealthy Catalonia called for secession from Madrid.

European stock markets fell sharply on Wednesday as protesters took to the streets in Greece in a general strike, Spanish bond yields hit 6 percent over austerity protests and wealthy Catalonia called for secession from Madrid.

As of 12:20 GMT, the UK’s FTSE 100 stock index had fallen 1.21 percent to 5,788.62 points, Germany’s Dax was down 1.76 percent to 7,294.79 and France’s Cac 40 lost 2.25 percent to 3,434.46. The euro fell to a two-week low against the U.S. dollar, declining by 0.3 percent to $1.2863.

Greece is facing its first large-scale strike since the country’s coalition government took office three months ago to implement tight austerity measures and steer the Hellenic republic out of the sovereign debt crisis. Tens of thousands took to the streets on Wednesday to protest a new round of belt-tightening demanded by the European Union and the International Monetary Fund in exchange for fresh loans.

In Athens, over 50,000 people took to the streets chanting: "We won't submit to the troika (of lenders)" and "EU, IMF Out!"

The Greek anti-austerity protest escalated, with police firing teargas in response to protesters throwing stones and petrol bombs.

Investors were also greeted by a wave of negative news for Spain, whose capital Madrid was rocked by violent anti-austerity protests overnight while its wealthy Catalonia region announced early elections that could see the country’s most economically-developed region declare its independence from Spain at a time when the Spanish government is taking painstaking efforts to remain in the eurozone and keep the economy afloat.

Spanish bond yields rose sharply in Wednesday’s trade, rising above 6 percent for the first time in a week amid increased investor fears over political turmoil in the eurozone’s fourth largest econonmy and uncertainty about the government’s plans to rescue the banking system.

The Russian markets were not immune to the negative news from Europe, with the ruble-denominated MICEX stock index falling 1.85 percent to 1,455.55 points and the dollar-denominated RTS index declining by 2.76 percent to 1.469.22 points as of 4:30 p.m. Moscow time (12:30 GMT).

The ruble fell by 32 kopecks against the dollar to 31.28 and by 7 kopecks against the euro to 40.18.