FTSE down 4%
London’s leading share index nose-dived 4% into the red today as Lehman Brothers’ demise sparked dramatic losses across stock markets globally.
The FTSE 100 Index plunged 214.3 points to 5202.4 by mid-morning trade, mirroring hefty falls seen across Asia and Europe.
In Asia, Tokyo was shut, but the Taiwan stock exchange fell to its lowest closing level in almost three years, while in Europe, France’s CAC 40 dropped fell more than 4% and the Dax in Germany plummeted 3%.
Banks were suffering the most as confidence in the financial sector was shattered by news that Lehman Brothers filed for Chapter 11 bankruptcy and Merrill Lynch had been bought in a $50bn (€35.2bn) deal.
HBOS was the leading blue chip faller in London, down nearly 20%, with Barclays down 12% as investors digested the seismic announcements.
Just one Footsie stock was in the black – traditionally defensive tobacco stock British American Tobacco, up 2p at 1867p.
HBOS shed 55.75p to 226.25p, RBS slid 31p to 208.75p and Barclays – which had been one of the front-runners to stage a rescue deal for Lehman before it walked away – also lost 44.75p to 305.75p.
Other financials on the back foot amid funding problems also announced over the weekend at US insurance giant AIG were Prudential, down 47.5p to 503.5p and Norwich Union owner Aviva, which lost 35.75p to 497.75p.
Retailers were also suffering, with Marks & Spencer down 10.25p to 237.75p and Sainsbury’s down 14.5p to 350.5p.
Meanwhile, the benchmark oil price fell back below 100 US dollars for the first time in nearly six months, sending oil majors BP and Royal Dutch Shell down 3% - a drop of 15.75p to 494.25p and 45p to 1673p respectively.
And the sell-off saw housebuilders hit hard in the FTSE 250, with Taylor Wimpey off 11%, or 5.75p to 48.25p and Barratt Developments down by 10% as it dropped 15.25p to 130.25p.
