FTSE 100 drops 7%
FTSE 100 drops 7%
Wednesday 15th October 2008
The FTSE 100 dropped 7.14 per cent today as fears over the economy replaced fears over banks.After two days of renewed confidence surrounding the bank rescue plans put in place, the City fell back to earth today.
The index closed down 313.86 points to 4,080.35.
Leading the falls were the commodity stocks, as fears of drooping demand and falling oil prices hit traders' confidence. And with mining and energy stocks accounting for up about 20 per cent of the index, falls again have been reported.
Miner Eurasian dropped 24.78 per cent, Kazakhmys was down 22.27 per cent, Xstrata fell 19.53 and Anglo American slid 19.10 per cent.
Insurer Old Mutual was down 17.98 per cent.
Only four firms saw gains in the top 100 shares. Pharma giant Shire was up 2.60 per cent and Thomas Cook gained 1.23 per cent, while Barclays and HBOS gained 1.22 per cent and 0.47 per cent respectively.
The downward march was followed in New York, with the Dow Jones down 3.52 per cent at 11:39 EDT (16:39 BST).
Over the morning's trading on Wall Street, only Coca-Cola and Intel saw gains, while American Express was down 11.42 per cent, AIG dropped 8.21 per cent and Citigroup fell 7.84 per cent.
In Europe the Cac 40 fell 6.82 per cent and the Dax dropped 6.49 per cent.
"The optimism of Monday and Tuesday has given way to another slide on the global markets as recession fears surface once more," said Tim Hughes, head of sales trading at IG Index.
"Gains made on the back of the recent banking rescue plans from the US and European countries have been wiped out today as investors began to take the impact of slowing economic growth on board."
He added: "It's all or nothing with the FTSE at the moment, with yet another large one-day movement.
"The comedown after the euphoria of the multi-billion pound bail-outs earlier this week seemed inevitable, although a sharp rise in the latest UK unemployment figures hasn't helped matters.
"Although the global slowdown seems increasingly evident and investors are not so much pushing as sitting on the sell button, one thing that has been consistent has been the volatile nature of the UK's leading index."
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