US recession fears halt FTSE rebound
Persistent fears over a US recession brought the FTSE 100 Index rebound to a grinding halt today as investor nerves sent stocks plunging.
The London market dropped nearly 3% at one stage as fears of a dire start to trading on Wall Street added to disappointment over UK interest rates.
The Footsie had opened more than 100 points higher this morning as investors were buoyed by the US Federal Reserve’s surprise move yesterday to cut interest rates in an effort to avoid recession.
But minutes of the Bank of England’s latest rate-setting meeting suggested concerns over inflation would hamper any dramatic cuts on this side of the Atlantic.
And stocks were hit further as the Dow Jones Industrial Average plummeted by more than 200 points in early trade as concerns over a recession failed to budge.
David Jones, market strategist at IG Index, said yesterday’s rate cuts in America had failed to ease concerns over the underlying economic woes.
“The long term problems are still there and the Footsie is now nearly back to where it was before yesterday’s rate cut,” he said.
