Renewed pessimism swept through international markets like wildfire overnight, with investors revisiting their angst regarding US and European debt.

In Europe a fresh warning on France's credit rating from Moody's saw markets tumble, with the FTSE slumping 140 points (-2.6%) to settle at 5223, whilst the CAC (-3.4%) and DAX (3.4%) suffered even heavier falls.

Broken down debt talks in Washington helped send markets lower in the US, with concern mounting that US$1.2 trillion in automatic federal budget cuts will be triggered if lawmakers fail to reach a deal.

The Dow Jones slid 249 points (-2.1%) to settle at 11547, whilst the S&P 500 and the Nasdaq lost 1.9%.

The British pound fell to a one-month low against the greenback after an industry report showed UK home sellers cut asking prices by the most in a year.

Conversely, the greenback and yen rose against most of their major peers on demand for safety.

Commodities were generally weaker, with oil dropping for a third consecutive session and gold slumping 2.3% and falling below US$1700 an ounce to settle at US$1686.

There is no major local data due out for today's session.

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Morning Market Analysis: Confidence Wanes is a post from: Australian Stock Report Market Pulse Blog