The twin spectres of more banking write-offs and a possible US recession have sent shares tumbling today.
With Citigroup and Merrill seeking $19bn between them to bolster their balance sheets and poor US retail sales, Wall Street has slumped more than 200 points. Talk of a possible emergency US interest rate cut is also unnerving investors.
So, no surprise, the UK market has followed suit. The FTSE 100 closed down 190.1 points at 6025.6, its lowest level since August 16 last year, when it fell to 5858.93 in the wake of the credit crisis. It is also the biggest one day points fall since December 13.
Housebuilder Taylor Wimpey has lost all its early gains, and ended up as the biggest faller in the 100 index. It fell 13.3p to 159.2p after it revealed a 19% fall in its forward order book.
There was no recovery for the retailers, with Argos owner Home Retail Group joining the list of fallers. It lost 19.25p to 261.75p as Lehman Brothers cut its price target from 425p to 359p. Lehman said: "We would highlight a negative consumer outlook for 2008/09 and believe consensus forecasts may face downside risk, given trading statements across the sector."
There were only five risers in the leading index and at least two of those - J Sainsbury and Experian - were boosted by analysts. Sainsbury added 6.75p to 386p after Goldman Sachs upgraded from neutral to buy, while Experian rose 9p to 375p as UBS issued a buy note, although the bank cut its price target from 660p to 530p.
