Global markets lost ground overnight, as investors were spooked by euro zone instability and a slightly disappointing report on the U.S. housing market.

In London the FTSE 100 shed 92 points (-1.6%) to settle at 5768, whilst the CAC (-2.8%) and DAX (-2%) suffered even heavier falls. Stateside, the Dow Jones gave up 44 points (-0.3%) to settle at 13414, whilst the S&P (-0.6%) and NASDAQ (-0.8%) also lost ground.

Sales of new homes declined slightly in August, after economists had expected an increase. The Commerce Department reported that new-home sales fell 0.3% from the previous month to a seasonally adjusted annual rate of 373,000.

At the same time, though, the median price for a new home increased 17% from August 2011, reaching a level not seen since March 2007. Front month crude oil futures dropped 1.5% to settle at $89.98 a barrel, while October gold futures fell 0.7% to $1,754.40 an ounce.

The US dollar rose against the euro, but lost ground against the yen. Yields on benchmark 10-year Treasury bonds fell to 1.616%. There is no major local data due out for today's session.

Morning Market Analysis: Bears Dig In is a post from: Australian Stock Report Market Pulse Blog