Respite as Footsie recovers slightly

SHELL-shocked investors were given some respite today after the City’s worst trading session in nearly three years.

An uneasy calm descended on the London market following yesterday’s panic-driven slump of 4.7 per cent or 246 points, with the FTSE 100 Index opening one per cent, or 60 points, higher.

Yesterday’s rout was triggered by alarm over the US Federal Reserve’s gloomy view of the economy and its failure to inspire traders with new emergency measures, including a process dubbed Operation Twist.

Wall Street’s Dow Jones Industrial Average finished 3.5 per cent lower last night - meaning it has lost six per cent of its value in the last two days - while Hong Kong’s Hang Seng index fell 1.9 per cent after losing nearly five per cent the day before.

Traders warned that any rally may prove short-lived until there is a political consensus on how to solve the problems in the euro-zone and in many of the other developed economies.

Chris Weston, a trader at IG Markets, said: “Unfortunately for the market, a lack of political leadership seems to be one of the biggest reasons as to why we can’t make any meaningful inroads into solving this crisis.”