It's not getting any better out there. The FTSE 100 is now down 72.2 points at 5667.9, and Wall Street is forecast to open around 190 points lower.
Traders said part of the UK fall was due to comments by both the Bank of England and the European Central Bank that inflation is their prime focus. This seems to rule out emergency rate cuts a la Federal Reserve, although it would surely not stop a 25 basis point reduction in UK rates when the Bank meets in February.
Meanwhile, with growing fears of a global recession, oil has fallen around $1 to just over $87 a barrel. So BP is down 15.5p to 511p, while Royal Dutch Shell is 61p lower at £17.76. The two oil groups between them account for nearly 30 points of the FTSE fall.
There are also vague rumours of futher writedowns at a major bank. The UK banking sector as a whole was fairly mixed, with hopes of an interest rate cut countered by a note from ABN Amro. Amidst a range of sell advice on the likes of HBOS and Alliance & Leicester, ABN has upgraded HSBC from sell to hold.
"After a 13% decline since our downgrade in December, we upgrade HSBC in recognition of its balance sheet strength and diversification as well as our growing expectation of underperforming asset disposals," said ABN.
HSBC is up 18.5p to 758.5p, while HBOS has fallen 8p to 652p and Alliance & Leicester has edged up 0.5p to 714p.
.png?w=600)
