Shares edge up after two days of losses

London’s FTSE 100 Index made cautious progress today in the wake of two days of heavy losses.

The blue-chip index was up 14.4 points at 6186 after investors drew encouragement from a positive close on Wall Street, even though Asian markets did little to help following a 1% drop for the Nikkei in Tokyo.

This week’s global stock sell-off, which saw £64bn (€95bn) wiped from the value of London’s leading shares, was fuelled by speculation that China’s government would try to clamp down on illegal share trading and might impose a capital gains tax on stock market earnings.

Markets had climbed to record levels in a number of regions, prompting some analysts to fear that shares might have gone too high, too fast.

Analysts said the global jolt was most likely to be a correction to cool overheating markets.

Matt Buckland, a trader at CMC Markets, added: “If this does indeed prove to be the bottom of the run of selling, then the market can perhaps start to focus a little more on fundamentals rather than raw sentiment.”