Global economy fears hit leading shares

Britain’s biggest companies fell back on the stock market today as fears about the global economy took hold once more.

By mid-morning the FTSE 100 Index was off 52.2 points at 4561.7 after having tumbled by close to 100 points earlier in the day.

The falls were in stark contrast to strong gains yesterday in the City and on Wall Street where the Dow Jones Industrial Average surged forward last night.

Today, however, the Dow is predicted to lose ground after the opening bell on concern about key consumer confidence numbers due out in the United States this afternoon.

The figures will provide a glimpse of how US consumers are feeling after terrorist massacres on September 11.

Their spending power is crucial to the health of the global economy and any significant drop-off could push the US into a lengthy recession.

Tom Hougaard, analyst at City bookies Financial Spreads, said: ‘‘The consumer is the key to the whole equation.

‘‘If we are going to move forward it has to be on the back of them continuing to spend.’’

In London, oil giants Shell and BP were among the heavy fallers on concern about the impact of low oil prices and reduced demand on their profits.

Banks were also on the slide while British Airways, Airbus partner BAE Systems and household products group Unilever fell.

The heaviest FTSE 100 faller was, however, music group EMI which saw a third of its market value wiped out after a profit warning.

EMI, the home Robbie Williams and the Beatles, said its full-year profit would be 20% below last year’s level.

The FTSE 100 gained 180.2 points yesterday and today’s setback was of little surprise to many City watchers given the current volatility.

Hilary Cooke of Barclays stockbrokers said: ‘‘Oil and banks are off and people are expecting the US to open lower today.

‘‘But it is a very, very difficult market to read. We are seeing some big swings on little change in the news flow.’’