Investors braced for further footsie falls

Investors were today anxiously watching the FTSE 100 index after they were warned to expect another stressful week following last Friday’s £34bn (€53bn) slump in the value of London’s leading shares.

While the Index is likely to stage a brief rally early today, analysts are not expecting a dramatic recovery in fortunes just yet.

The Footsie is at a nine-month low of 4630.8 as worries in the US about the pace of the economic recovery shatter confidence in London.

The prospect of higher interest rates on this side of the Atlantic has added to the depressed mood as the Footsie slumped 141 points on Friday.

Most UK market experts believe the blue-chip index has further to fall as the market struggles to find much in the way of positive news.

Justin Urquhart Stewart, of Seven Investment Management said: ‘‘There’s going to be a good deal of nervousness. At some point I think the market has a chance of going as low as 4,300.’’

That would be weaker than the immediate aftermath of the September 11 terrorist attacks when the Footsie hit a four-year low of 4433.7.

The only glimmer of hope for investors tomorrow will be a knock-on effect from the modest recovery in US stocks after London’s close on Friday night.

Mr Urquhart Stewart added: ‘‘Given the fact that the US was not as bad as it could have been means tomorrow might not be as bad in London.

‘‘But the reasons that have driven the market down will still be there.’’