Markets across Europe tumbled as weak consumer confidence numbers from the US compounded continuing fears of European debt worries and the state of the global recovery.

FTSE 100 sold down to 4899, nearly a 3% retracement before making something of a recovery, but still closing down over 2.5% Germany’s Dax traded lower by 3% as negative sentiment intensified as client’s dumped stock and shied away from riskier assets.

Clients had been edgy this morning after the Dax opened surprisingly weak, setting the tone for a nervous morning session. Clients reduced positions amid light volumes causing European markets to quietly drift 1.5% lower. Heavyweight sectors Banks and Miners dragged the market lower, as the familiar round of global growth concerns returned to the fore, and investors retreated to the safety of the dollar and gilts.

Just as the market was hoping for something to spark a bounce from the day’s lows, clients were hit with a sucker punch as a worse than expected consumer confidence number hit the wires. Clients seem particularly concerned at the negative trend being set from US macro data after last week’s disappointing homes and employment data.

As investors struggle to find positives in the market, concern remains over how much lower we could go. With the FTSE now trading just above 4900 many see the market teetering just above significant technical levels of support which if breached could see much more aggressive retracements round the corner.

Please remember that Spread Betting and CFD Trading are leveraged products that carry a high level of risk to your capital and can result in losses that could quickly exceed your initial outlay. These products may not be suitable for everyone, so please make sure you fully understand the risks involved.

Spread Betting and CFD comments by Nick Serff, Market Analyst, City Index.

The above should not be construed in any circumstances as a recommendation or offer to sell or recommendation or solicitation of any offer to buy any security or other financial instrument.

Neither City Index not Spread-Betting.org warrant or represent that the material is accurate, complete, not misleading, or fit for the purpose which it is intended and it should not be relied upon as such.

The problem with trading shares around the World Cup is that much of the positive effect of the tournament will already be priced into the shares. Also if England perform poorly, or if they are just plain unlucky, then some of the more obvious buys become sells.

Having said that, with Financial Spreads you can speculate on stock markets and shares that are listed in some of the more consistent countries.

For example, looking at German shares an investor could speculate on the Adidas share price to increase. And there won’t be much getting away from Adidas this summer. They sponsor both Germany and France, they are official FIFA partners, they sponsor players like Lionel Messi and David Villa. They even supply the match balls.

It is also possible to spread bet on other European shares such as Carlsberg, however, the Danes are not the 2010 sponsors. In contrast, the US stock market does supply a few sponsors in the form of McDonalds and Coca Cola.

Another option is spread betting on the South African Stock Market to perform well. During the more recent World Cups the host nation’s leading Stock Market Index has performed well around the tournament.

Looking closer to home though, the shares of the various UK bookmakers are tempting but there are a few pitfalls. If England do not progress beyond the Group Stage then revenues will certainly be down. If England were to win the World Cup and Rooney were to pick up the Golden Boot, not an inconceivable combination, then the bookmakers could be facing some rather damaging payouts.

An Irish bookmaker like Paddy Power with less England specific exposure could be a less risky trade. Having said that Paddy Power also have a sports hedging business whereby a firm, eg a Furniture Company, offers its new clients a discount if England win the World Cup. The Furniture Company then hedges off that risk with Paddy Power. This additional exposure makes these particular Irish shares a less tempting proposition.

Elsewhere, the UK’s pub chains should experience reasonably brisk trade but again much of the upside could already be priced into the shares and there might be better value elsewhere.

Looking at the more traditional sports retailers like JJB and Sports Direct they also have positives and negatives. They should see increased England shirt sales but the supermarkets are increasingly active in that market. Tesco are even an official England sponsor for 2010. The extra sponsorship, shirts sales and mechanise should give the shares boost. Also the other positive for Tesco is that if the England team enjoys a good run that should further boost alcohol sales.

Adidas should not be ruled out and neither should trading the South African Stock Market however Tesco does have a few more strings to its bow. The supermarket also has fewer downsides and for that reason it is probably the stock to watch out for.

Financial spread betting carries a high level of risk to your capital. You may lose more than your initial investment. It may not be suitable for all investors. Only speculate with money that you can afford to lose. Please ensure you fully understand the risks involved and seek independent financial advice where necessary.

Investor sentiment continued to remain volatile going into the European close with equity markets seesawing between losses of 0.5 and 1 percent before closing on the latter for the day.

The Oil & Gas sector was the main drag on the FTSE 100 with BP reversing earlier gains to lose nearly 1 percent on the day. News from the US coast guard that the spill containment unit could possibly be disconnected in the event of a hurricane pushed the share price back to within touching distance of its recent low.

The miners were also weaker on the day, with the sector losing 2.2% and contributing much to the FTSE 100 weakness.

Wall Street came under pressure with the DOW managing to trade just shy of the psychologically important 10,000 level before slipping back to support at 9900. Investors continue to remain jittery after Fridays US jobs data fell well short of market expectations

The much better than expected German Industrial Orders data did help Indices to reverse much of the earlier losses, with the FTSE 100 trading flat at one point albeit briefly. However, in what has become a familiar trend over the last month or so, investors are all to happy to use rallies as opportunities to close positions out at high levels, and this forced the FTSE back down over 1% on the day.

Please remember that Spread Betting and CFD Trading are leveraged products that carry a high level of risk to your capital and can result in losses that could quickly exceed your initial outlay. These products may not be suitable for everyone, so please make sure you fully understand the risks involved.

Spread Betting and CFD comments by Nick Serff, Market Analyst, City Index.

The above should not be construed in any circumstances as a recommendation or offer to sell or recommendation or solicitation of any offer to buy any security or other financial instrument.

Neither City Index not Spread-Betting.org warrant or represent that the material is accurate, complete, not misleading, or fit for the purpose which it is intended and it should not be relied upon as such.