UK NEWS

FTSE FIGHTS BACK AS ANOTHER DRAMATIC DAY ROCKS THE CITY

Stock markets around the world have plunged again today

Monday October 27,2008

By Geoff Marsh for express.co.uk

Comment Speech Bubble Have your say(3)

LONDON'S FTSE 100 Index staged a fight-back from fresh five-year lows today in a see-saw session for the UK’s leading shares.

The Footsie plunged to its lowest point since March 2003 in early trading - falling 5% as a sell-off in Asian markets spooked jittery traders.

But a better-than-expected start on Wall Street and a broad hint at more rate cuts next week from the head of the European Central Bank helped the top-flight claw back most of the losses.

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The Footsie eventually finished 0.8% lower - losing 30.8 points to 3852.5 - after September sales of new homes in the US improved on the 17-year low seen in August, helping to push the Dow Jones Industrial Average into positive territory.

Meanwhile ECB president Jean-Claude Trichet told a banking council that an interest rate cut was “possible” next week. US policymakers could also deliver more rate cuts to stave off recession at their next meeting on Wednesday.

David Jones, chief market strategist at IG Index, said: “A stronger start on Wall Street boosted afternoon trading in the UK, but the blue-chip index was always looking for a flat finish at best.”

Early sentiment in London was hit by steep overnight declines in Asia, with Japan’s Nikkei index falling 6.4% to hit its lowest close since 1982, while Hong Kong’s Hang Seng closed 13% down.

The dive followed a devastating day for the UK’s biggest firms on Friday, when almost £49 billion was wiped off the Footsie after official figures revealed a shrinking UK economy for the first time in 16 years.

Worries have intensified over the resilience of Asian and emerging market economies in recent days, with South Korea’s central bank making its biggest rate cut ever to ward off recession.

The Asian concerns also hit HSBC and Standard Chartered due to their exposure to emerging economies. Standard Chartered was the Footsie’s leading faller with a decline of more than 10%, while HSBC finished almost 5% down after clawing back heavier losses earlier.

The International Monetary Fund has also agreed billions in loan for Ukraine and Hungary - marking the first time nations in the former Eastern bloc have received IMF support.

In London, oil and mining firms also weighed on the Footsie as crude oil prices fell a 17-month low of 61.30 US dollars a barrel at one point.

Oil giants BP and Royal Dutch Shell were both in negative territory, while the worse-hit Footsie firms were oil and gas services firms Petrofac and Wood Group, which both tumbled more than 8%.

Many of the Footsie’s heavyweight mining firms were also in the red amid fears of reduced demand for commodities.

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FINANCIAL SITUATION

27.10.08, 11:25pm

The present sticking plaster solutions are like using a hammer to remove a screw when a screwdriver is available. It is essential for a stable economy in the future that the private banks can only lend out what is saved with them, and only the government should be allowed to create new money in line with extra business and population growth. This would mean money would hold its value

• Posted by: Marlene_Dietrich • Report Comment

FINANCIAL SITUATION

27.10.08, 11:23pm

• Posted by: Marlene_Dietrich • Report Comment

IT WOULD SEEM THAT THE BUBBLE HAS WELL AND TRULY BURST

27.10.08, 2:05pm

This was a disaster waiting to happen. The world could not live on borrowed money for ever. Now the money has to be paid back, but the cupboard is bare and lots of people are going to suffer. People in high places should have seen this coming. Why are we not seeing some very high-level heads rolling now? They still keep heir jobs as though nothing has happened. It stinks!

• Posted by: beefsandwich • Report Comment