Investors prepare for bleak winter

More than £34bn was wiped off the FTSE 100 Index in the first half-hour of trading.

Investors are bracing themselves for a bleak winter of company lay-offs and profit warnings.

Investors took their lead from further falls on Wall Street overnight and all but three of Britain's top 100 companies lost more ground.

It's a cycle of bad news that will get worse before it gets better, says David Liston, of Gerrard stockbrokers.

He said: "The top of the market is about greed, the bottom is about fear and below that we have panic, which is gripping investors right now.

"Today's market falls are being fuelled by the impending US military retaliation and rumours of fresh terrorist attacks tomorrow."

City experts predict the Dow could fall even further later today as the gloomy outlook and uncertainty following last week's terror attack worry traders.

Mr Liston adds: "From now until the end of the year we are going to have some horrible news concerning lay-offs and profit warnings. All the fears about recession are going to become a reality.

"But it's important to remember that this is part of the cycle of markets. Those companies with sound long-term fundamentals, which aren't heavily reliant on exports are going to survive."