FTSE sheds another £25bn
The FTSE 100 Index was back at levels last seen in December today after world markets again felt the heat from inflation and interest rate worries.
London’s leading shares shed £25bn (€36.5bn) of their value by the end of the session, with the Footsie closing 101.3 points lower at 5519.6. The recent turbulence means the blue-chip index has now lost 600 points since April.
At one point the Footsie was 153 points lower as traders digested a 4% fall for the Nikkei in Tokyo overnight and official figures showing UK inflation rose by 0.2% in May to 2.2% – above the Government’s 2% target.
Investors in Europe endured similar losses, although the Dow Jones Industrial Average opened in more resilient form ahead of key economic figures in the US later this week.
Fears that further interest rates may be coming in the US and eurozone have caused investors to run for cover. Mining stocks were badly affected in London, amid fears that higher borrowing costs will curb economic growth and lead to a drop off in demand.
With metal prices under pressure, Kazakhmys was worst hit with a drop of 7%.
And Alliance & Leicester was more than 5% lower after it emerged that a possible candidate to buy the UK bank had made a move on a different target.
