THE TELEGRAPH: The FTSE 100 plunged more than 10pc this morning as fears over a global banking crisis and recession combine to rout stock markets around the world.
The UK's leading share index fell below 4,000 points for the first time in five years as equity markets across Europe were hammered after steep declines overnight in Asia and the US.
By 10am the FTSE had recovered slightly to 4,077 but was still showing heavy losses. "I'm sitting on my hands and quite a few people I talk to are doing the same," one trader said.
Shares in banks and commodity-based companies have been particulary hit with HBOS losing 18pc, Barclays 13pc and Rio Tinto 11pc.
"Fear leads to more fear," said Andy Brough, fund manager at Schroders, said. "Market makers are taking pre-emptive action and marking down prices before people start selling. The big institutions are sitting on their hands, the volumes are very low."
He said banking stocks were being badly hit because credit default swaps tied to the collapsed investment bank Lehman Brothers are due to be settled by this evening, revealing the banks which were most exposed. FTSE 100 Dives 10pc as Global Markets Slide >>> By Graham Ruddick | October 10, 2008
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