Stock markets plunge as fear mounts over return to recession
STOCK markets around the world plunged again yesterday as fears grew that the global economy would slip back into recession.
The FTSE 100 Index ended a week-long slide in which it saw 9.8 per cent - or £147.9 billion - wiped off its value.
That was the worst performance since October 2008 when investment bank Lehman Brothers collapsed and triggered turmoil in global financial markets, marking the start of the credit crunch.
Markets across the world plummeted amid fears the United States is heading back into recession and Europe's debt crisis is worsening.
Analysts believe the plunge in share prices may worsen unless Governments take firm action to convince the markets they can pay off their loans.
''This crisis will run and run, and could make Lehmans look like a Tupperware party," warned Michael Hewson, a market analyst at CMC Markets.
''The nervousness amongst traders is likely to continue into next week because...the American economy is still showing significant signs of slowing down.
''The bigger problem is the Eurozone and the absence of any concrete measures to stabilise Italy and Spain's precarious fiscal position.''
Prime Minister David Cameron, holidaying in Italy, last night spoke to German counterpart Angela Merkel about the European and US financial instability.
He is also in contact with Chancellor George Osbourne, who is in the US, and Deputy Prime Minister, Nick Clegg, who is in France.
Foreign Secretary William Hague - the most senior Cabinet minister remaining in the UK - insisted the Government was "fully functioning" and a team of senior ministers, including Business Secretary Vince Cable, are working on the issue.
The Richmond MP, who yesterday chaired an urgent meeting on the economic crisis, stressed that ministers had taken the "necessary action" and now needed to "follow it through with clarity and confidence".
The FTSE 100 Index fell 146.2 points, or 2.7 per cent yesterday while the CAC 40 in France and the DAX in Germany fell 1 per cent and 3 per cent respectively.
In America, the Dow Jones lost nearly 1 per cent of its value in early trading following its 4.3 per cent fall on Thursday, but gained 1 per cent later on.
Meanwhile in the Far East, Japan's Nikkei 225 stock average slid 3.4 per cent, Hong Kong's Hang Seng dropped 4.4 per cent, South Korea's Kospi index shed 3.6 per cent, and Australia's benchmark dropped 4 per cent.
Ftse 100 Index - News
The FTSE 100 Index ended a week-long slide in which it saw 9.8 per cent - or £147.9 billion - wiped off its value. That was the worst performance since October 2008 when investment bank Lehman Brothers collapsed and triggered turmoil in global
A television monitor showing a drop in Hong Kong's benchmark Hang Seng Index. The FTSE also plunged amid world financial turmoil. Photograph: Tyrone Siu/Reuters Turmoil in the global financial markets continued on Friday when the FTSE 100 dropped more
Fears that the the world economy could slip back into recession led London's benchmark FTSE 100 Index to lose 50bn billion of its value – its biggest fall of the year. Asian stock markets also plummeted as investors sold riskier assets amid fears the
The FTSE 100 Index rallied 56.9, or 1 percent, to 5872.09 at 8:35 am in London. The FTSE All-Share Index advanced 1 percent to 3054.78, while Ireland's ISEQ Index gained 0.1 percent to 2824.06. "It's one area of uncertainty that will hopefully be put
The FTSE 100 - representing Britain's largest quoted companies - has fallen more than 12 per cent, however falls elsewhere have been even more severe. The Aim index - representing Britain's smaller and riskier companies - and the FTSE 250 - which is
The FTSE Index Is Turning Into A Mining Company Index : Your Name ...
The FTSE 100 Index was first created in 1984 and companies such as British Telecom joined the FTSE Index when they were first privatised by the Thatcher government. Over the past few years, many mining companies have chosen to list their shares on the London Stock Market. Due to the large size of these companies, some of which have operations spanning the globe, they have joined the index and their shares have become one of the FTSE 100 companies. E.g. The Mexican silver miner Fresnillo listed on the London market (and joined the index) in 2008.
The next step, once the index of FTSE 100 share prices had been created, was to introduce a futures contract based on the index. Although strictly anybody buying a futures contract acquires an obligation which is determined at expiry (four times a year in March, June, September and December), futures contracts are rarely held to expiry. In reality they form an easy way to speculate on the direction of movements in the value of the FTSE 100 Index as the contract is very liquid and trades on a narrow bid/offer spread. Fortunes were made and lost trading FTSE futures in the most recent bear market which ended in March 2009.
Glencore was the most recent mining-related company to list and their shares entered the FTSE Index on 24 June 2011. There are now 20 mining-related companies in the FTSE (including oil & gas companies on the basis that they extract oil & gas from underground too) and they provide 5 of the 10 biggest FTSE 100 companies. Hence the Index is steadily turning into an index dominated by mining-related companies.
For further financial information on FTSE 100 companies please follow the link.
RT @: Stocks update: All stocks lower. US stocks down 0.7%, the FTSE 100 index down 2.4% and the Dax down 2.6%. The latest: 
RT @: The FTSE 100 index has closed down 2.71%
News updates: FTSE 100 Index closes down 146, drop of 2.7% at 5247, as global market turmoil continues
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