Traders will have to find a new word for volatile, judging by the see-saw performance of the market so far. After picking up in the wake of a positive Wal-Mart statement from the US and an $18.8bn chemicals deal, UK shares are now plunging again and stand perilously close to bear market territory.
The FTSE 100 is currently down 129 points at 5400.6. Dealers pointed to a turnaround on Wall Street, with the added complication of programme trades kicking in as the index heads downwards.
The over-riding fear is of more write-offs from the banks, with a gloomy outlook for US mortgage lenders Freddie Mac and Fannie Mae undermining confidence once more.
With the S&P 500 moving into a bear market last night, there is a certain inevitability about the FTSE 100 closing below 5385 and following suit.
"In some ways, perhaps this has to happen," said one trader. "The index has been falling 100 points, then recovering, but testing the limits. Once it finally falls into a bear market, it can then find its new level."
