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ITN
FTSE in freefall as panic spreads
FTSE in freefall as panic spreads
Shares on the London Stock Exchange have gone into freefall as panic spreads across the world markets. More than 400 points were wiped off the FTSE 100 Index in devastating early session trading taking it well below the 4000 level before it staged a slight recovery. It was the first time the FTSE 100 fell below the 4000 barrier since 2003. The falls follow similarly dramatic overnight losses on Wall Street and in Asia. Japan's benchmark Nikkei 225 index closed down 881 points lower in its worst session since Black Monday in 1987 while the Dow Jones Industrial Average closed below 9000 for the first time since 2003. The latest slump came despite co-ordinated interest rate cuts and this week's efforts by the UK Government to bolster UK banks. Henk Potts, director of investment strategy at Barclays Stockbrokers, said: "I think it's very close to panic. We are drowning in a sea of red numbers and fundamentals have gone out the window." He added: "Investors are concerned about the exacerbation of the credit crunch and the gloomy forecasts for economic growth. "The reality is that most investors have been spooked by the sheer pressure that the credit crunch is putting on the global economy." Matt Buckland, a trader at CMC Markets, said markets were reeling because of recession fears and the fact that the fire-fighting efforts of central banks worldwide had not resulted in any thawing of interbank lending. He said: "US and European taxpayers have collectively tried to dig the financial sector out of one almighty hole but the response certainly hasn't been as planned." Banking stocks are among the worst affected with the Government's bail-out package failing to reassure panicked investors. Halifax Bank of Scotland plunged 24 per cent into the red, with its merger partner Lloyds TSB down 14 per cent and Barclays also suffering a 14 per cent fall. Insurers are also taking a hammering with falls compounded by news that Japanese life insurance firm Yamato Life Insurance Co had collapsed - the first financial firm in Japan to fail due to losses linked to the global financial crisis.
ITN | October 10, 2008
