The rout continues. With the US inflation worries and the rising oil price, the FTSE 100 is heading for its worst one day performance since the middle of March.
The leading index is now down 145 points at 6231.5, with Wall Street more than 180 points lower. Analysts pointed to renewed inflation fears after US producer prices came in higher than expected, not to mention the crude oil price topping $129 a barrel. Sentiment was not helped by rumours coming out of Israel that president Bush was considering an attack on Iran. These were subsequently denied, but the damage was done.
The UK market was also weakened by falls in the miners.
Ryan Kneale, market analyst at City bookmakers BetsForTraders.com, said: "All the euphoria that we were on the road to recovery has been blown out of the water today. The markets have been artificially propped up by commodity stocks over the past few months and as a result the real trouble has stayed out of sight. When commodities have a bad day, like today, the whole market feels it, as there is nothing left to prop them up."
