The FTSE 250 is down today as economists warned that european countries risked shunning domestic growth at the risk of cutting the fiscal deficit.

This was a real blow for UK companies hoping to emerge from the tough economic crisis by EU exports whilst having its own fiscal deficit to deal with in domestic markets.

And today as the short-selling ban in Germany combined with market worry companies on the FTSE 250 went plummetting.

Whereas the FTSE 100 gains some measure of protection from having 'international' businesses that can weather the domestic crises, companies in the FTSE 250 were not as well 'protected'.

Overall, the FTSE 250 was down 2.5 pct compared with the FTSE 100, which was down just 1.7 pct. Companies such as HMV, Regus and Inchcape were all down by 5.49-7.27 pct - worsened by poor outlook and Trinity Mirror who also warned of an advertising slump recently were down 6.71 pct at closing.

Only, Mitchells & Butlers who released a 55 pct rise in profits recently - was amongst - a handful of companies to rise.

Marstons, who performed well in H1, slumped some 5.15 pct.

Regus who released a statement yesterday said that the UK 'remained its most challenging region' sending its shares down 18 pence over one day.

"All countries will be exporting but not growing in terms of their domestic demand" warned Stephanie Flanders at the BBC, as shares went tumbling on worse than expected U.S economic data.

U.S. stocks extended losses in the morning session after gaping sharply down at the opening on continued Europe concerns.

Elsewhere, the Chicago Board Options Exchange Volatility Index (VIX), know as the "fear index," spiked to the highest level in over a year and above the May 6 Flash Crash level.