City plunges more than 4% to reach new five-year lows

THE London market suffered another bloodbath yesterday, plunging more than 4% to reach fresh five-year lows as investors suffered a deepening crisis of confidence.

By the close of trading, the FTSE 100 Index was down 190.1 points at 4230, sliding through its recent low of 4392 to reach its lowest point since April 3 1997.

More than £45 billion was wiped off the value of blue chip stocks in the session, which followed Wednesday's 122.8-point dive.

The Footsie spent the day in turmoil but the steep losses came after Wall Street opened lower again in the afternoon.

Insurers, banks, drug stocks and oil stocks all took a battering. Among the insurers hit by worries of the effect of falling markets on their funds Royal & Sun Alliance slid 9%, off 20p to 212p while Aviva, the former CGNU, slid 11%, off 49p at 413p.

Legal & General was down 8p at 113p while Prudential fell 37p to 501p.

In the banking sector, Barclays slipped 26p to 456p, HSBC dropped 21p to 720p and Royal Bank of Scotland lost 110p to £15.85.

The only Footsie risers were Gallaher, up 6p at 615p and SABMiller up 3p at 507p.

The biggest fallers were Aviva, down 49p at 413p, Royal & Sun Alliance down 20p at 21p, GKN down 21p at 271p, Old Mutual down 6p at 81p and EMI down 16p at 220p.