FTSE slumps by 9%
A dramatic slide for share prices worldwide today killed off any hopes that markets could be on the mend after the recent banking crisis.
London’s FTSE 100 Index slumped by as much as 9% while European markets suffered a similar fate after Japan’s Nikkei index fell 9.6% last night.
Futures prices indicated more turbulence in New York later today as investors reacted to fears of a deeper than expected global recession. GDP figures showing the UK’s worst performance in almost 18 years added to the pain for the Footsie, which shed 7% or 296.4 points to 3791.5 by mid-morning.
The recession fears rocked banking stocks as Halifax Bank of Scotland fell 18% or 13.6p to 59.2p and Barclays slid 30.6p to 187.6p, a drop of 14%.
Miners were the other major casualties after declines of 69.5p to 557.5p for Vedanta Resources and a drop of 55.25p to 338.25p for Eurasian Natural Resources.
BP and Royal Dutch Shell were also down – 39p at 426p and 140p at 1359p – as slowdown fears countered any boost from Opec’s decision to cut production.
The latest stock market collapse also reignited worries about the solvency capital levels held by insurers.
Aviva dropped 32p to 243p while Prudential was off 12% or 38.25p to 291.75p after the Financial Times said the insurer was looking at parts of America’s AIG beyond its Asian operations.
National Express was another faller, down 6% to 35.5p to 574.5p, after it said the travel industry was not immune to an economic slowdown.
And department store chain Debenhams fell 15% or 4.5p to 24p after rival John Lewis said sales dropped by 7.6% last week. Currys owner DSG International was down 5.5p to 20p as the latest GDP figure raised fresh concerns about demand over the Christmas trading period.
