Footsie tumbles as investors worry about global economy

Investors on the London Stock Exchange look set for another long session as the Footsie index of 100 leading stocks plunges due to concerns about the global economy.

After an hour of trading, the index is down by more than 1.5% or 94.3 points and now stands at 5368.8.

New economy shares are once again proving a drag on the market, with investors taking their lead from a 6% fall overnight on the tech-laden Nasdaq Composite on Wall Street.

The Nasdaq fell to its lowest close since October, 1998, after further profit warnings from tech companies in the US.

In London, all but four of the top 100 stocks are in the red during early trading. They are led by software group Sage, which is down 9% or 19¾p to 201p; and computer services firm Logica, which is down 8% or 70p at 780p.

Telecoms are also under pressure, with Colt Telecom tumbling 53p to 622p; Spirent dropping 11p to 321p; and Telewest Communications falling 2½p to 99½p.

Rail operator Railtrack is continuing its slide, losing another 6% or 30p at 450p, after seeing £1bn wiped off its market value over the last two days.

Among the stocks in positive territory, insurance group Prudential is ahead 8% or 62p at 806p. Investors have been cheered by news of a counterbid for the Pru's agreed merger partner American General by US insurer AIG.

If American General decides to renege on its agreement with Prudential, it will have to pay £420m to the Pru.