Shares index battered by £35bn slump
Nearly £35bn was wiped off London’s blue-chip share index yesterday amid fresh fears about the eurozone and US debts.
London’s FTSE 100 Index slumped 2.3 per cent, or 133.9 points, to 5584.5 – its lowest level since November when markets crashed amid Ireland’s £72bn bailout. It was also the index’s biggest daily fall since November. The Dow Jones Industrial Average in New York also fell, by 0.8 per cent. The slump was triggered by renewed fears that America’s economy is heading for recession, fuelled by speculation the world’s largest economy will be damaged by recently agreed budget cuts.
And rising Spanish and Italian government borrowing costs reignited fears that the global market turmoil will push the two countries closer toward needing a bailout.