FTSE plunges again after rally

London’s leading share index plunged more than 2% today as persistent US recession fears brought an abrupt end to this week’s two-day rally.

The FTSE 100 Index fell more than 130 points as investor cheer faded over Tuesday’s US$200bn (€128bn) move by the Federal Reserve to ease credit market concerns.

Shares fell in response to big overnight declines in Asian markets, which followed a steep drop in the value of the dollar against the Japanese yen, sparking export fears.

Almost 150 points were added to the index over the past two days.

Claire Collingwood, a trader at CMC Markets, said: “It was always just a matter of time before the profit-takers moved in after Tuesday’s shot in the arm from the Fed.

“Sentiment started to swing just ahead of the close on Wall Street yesterday as crude prices breached US$110 a barrel for the first time in history, furthering fears of a US recession.”