FTSE falls below 5000

The FTSE 100 Index tumbled below 5000 today as world markets suffered another punishing session on fears over Europe and global economic growth.

Tensions in Korea added to concerns, sending Asian markets sharply lower overnight.

London’s Footsie followed suit, slumping to an eight-month low after plunging by 130.1 points to 4939.6 – a fall of 2.7%.

The Dow Jones Industrial Average on Wall Street was also heading for big falls, according to futures trading ahead of the US market open.

News at the weekend of a Spanish bank bail out compounded worries over the European debt crisis, while in Asia there were fears about the threats of military action in Korea and the impact on exporters of the weak euro.

Europe’s embattled single currency was down against the dollar and pound again today, with sterling up 0.7% to €1.17.

The euro fell more than 1% to $1.22.

Among stocks, miners and financials were suffering the most in today’s sell-off, with Eurasian Natural Resources and Lloyds Banking Group down 65.5p to 909.5p and 4.51p to 50.96p respectively.

Fellow part-nationalised player Royal Bank of Scotland dropped 2.97p to 42.4p.

Retail chain Marks & Spencer was caught in the wider declines, with shares down 7.3p to 326.2p despite a 4.6% rise in annual profits to £632.5m (€742m) coming in at the top end of analyst expectations.

Insurance giant Prudential fell 3% as it came under more pressure ahead of its £24.6bn (€28.8bn) AIA deal.

The group’s shares made a debut in Hong Kong and Singapore markets for the first time in a bid to attract new investors for a mammoth share issue, but both listings were down in a tough session for equities.

In London, Pru shares fell 16.5p to 513.5p.

Water firm Severn Trent was one of only a few top tier risers – ahead 9p to 1146p – as the sector bucked the wider falls thanks to better-than-expected results from South West Water group Pennon.

FTSE 250 firm Pennon surged 18.5p to 508p after its figures, which revealed a strong performance from waste disposal business Viridor, while a positive broker note on the sector also supported gains.