London market suffers bloodbath

The London market suffered another bloodbath today, 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 3rd 1997.

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

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

Downgrades on both General Motors and Ford, and news of a criminal probe into a US telecoms group sent shudders through the US Wednesday night and stocks continued to fall today.

Shares on Wall Street were further hurt after it emerged the US Securities and Exchange Commission was investigating drug giant Bristol-Myers Squibb to see whether the firm had inflated its revenues last year.

Fears about accounting standards and the health of the US economy have dogged Wall Street for months, and investors are increasingly worried about where the next scandal will come from.

In London, the falls were widespread and only two stocks from the Footsie managed to post gains.

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 212