THE NEWS WRAP: European markets hit a two-year low overnight

European markets hit a two-year low overnight as investors fretted over a potential debt default by Greece, as well as fresh concerns over the finances of Spain.

French stocks were worst hit, dropping 4%, while shares in the UK fell 1.6% and German shares slipped by 2.3%.

Markets were spooked by speculation that the German Government had admitted defeat in the bid to stave off a Greek debt default. Meanwhile, credit rating agency Moody’s warned that debt-cutting efforts by Spain’s regions weren’t going far enough.

Trade surplus remains steady

Australia’s trade surplus has remained at $1.8 billion, bolstered by continued Chinese and Indian demand for the country’s resources.

The July figures showed a fifth consecutive monthly trade surplus, although the value of Australian exports dipped by 0.9%. This was, however, balanced by a 0.9% fall in the value of imports.

UK entrepreneur rages at Google

A leading British entrepreneur has lashed out at Google for practising what he claims is “search engine censorship”.

Sir Brian Souter, founder of the successful Stagecoach transport group, said that links to his personal site from the Google search “Brian Souter” “mysteriously disappeared” on August 13.

Souter said that he will wage a campaign against Google over the issue. The search engine giant said that it couldn’t comment on individual cases.

Overnight

Despite market turmoil in Europe, the Dow Jones industrial average finished up 68.99 points, or 0.63%, at 11,061.12. The Australian dollar dropped to 103.37 US cents.