Stocks battered, pound bruised as fears persist

European stocks are primed for a pummeling on Friday, following ravaged U.S. and Asian shares, as Europe's debt crisis sent waves of dread through global markets and battered sterling and the euro.

U.S. stocks plunged 9 percent in the last two hours of trading on Thursday before clawing back some of the losses as a suspected trading glitch and fears of a new credit crunch in Europe threw markets into disarray.

Sterling was especially hard hit, falling to a one-year low against the dollar, as well as shedding gains against the euro as UK elections seemed likely to result in no clear winner [ID:nLDE64600H]. It shed 12 yen against the safe-haven Japanese currency at one point.

However, unlike the worst days of the 2008 credit crisis, when money poured out of riskier assets like equity funds and into money market funds, investors are not retreating completely. >>