Fiona Walsh, business editor
Wednesday March 14, 2007
Guardian Unlimited
The FTSE 100 index crashed more than 100 points this morning, falling 114.8 points at one stage amid fears of another global share sell-off.
There were widespread falls for leading shares, although prices had come off the worst by 10am, with the FTSE 100 recovering a little to 6,076.8 points. This is still down more than 80 points on the day and follows yesterday's 72 point slide.
Traders had been bracing themselves for a rough ride when London opened, after heavy losses on Wall Street and Tokyo, but the early rout was worse than feared. At its low point shortly after opening, the FTSE 100 index fell to 6,047.4 points.
Growing fears over the US economy are behind the latest stock market turmoil. US stocks plunged almost 2% on Tuesday amid increasing fears over the state of the American housing market, particularly the so-called sub-prime sector, where loans are made to borrowers with poor credit ratings.
New figures yesterday showed more and more homeowners across the Atlantic are falling behind with their mortgage payments and having their properties reposessed.
Fears that the mounting sub-prime crisis will spread to the wider US economy sparked a sharp decline in shares on Wall Street, with the Dow Jones Industrial Average tumbling by 242.66 points to 12,075.96, a fall of almost 2%, its second biggest one-day drop in almost four years.
Amid worries that the US problems could spread to the rest of the world, there were widespread losses in Asian markets overnight. In Tokyo, the Nikkei 225 index fell sharply, ending Wednesday's session more than 500 points lower, at 16,676.89, a fall of almost 3%.
Among the leaders, the banking sector was particularly hard hit. Shares in HBOS tumbled 49p to £10.27 and Barclays were 12.5p lower at 685p.
Mining stocks also suffered steep losses, with Xstrata down 62p to £23.05 and BHP Billiton 24p lower at £10.005.
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