The cost of insuring European corporate debt against default hit a two-year high and there were further rises in the US market as investor sentiment continued to deteriorate.

The iTraxx Crossover index of 50 mostly junk-rated European companies hit a record 366 basis points for the current series in volatile trade. It was 20bp up on the day and almost 100bp over the past week, although it recovered to stand at 350bp (see chart above).