The FTSE 100 Index tumbled through the symbolic 4000 barrier today as fears about the health of the global economy cast a cloud over the City.
After shedding 125.8 points yesterday, the FTSe was down 86 points at 3998.9 in mid-morning trading as a host of blue-chip stocks fell back.
Tom Hougaard, analyst at City Index, warned: “This could be very significant. If we don’t hold here, it paves the way for a fall to 3500.”
With little corporate news to encourage investors, mobile phone giant Vodafone slipped 3%, Lloyds TSB plunged 4% and insurer Aviva slipped 5%.
A downbeat forecast from US Federal Reserve chairman Alan Greenspan yesterday about the timing of an economic recovery knocked sentiment.
He said the US economy was still being affected by last year’s terror attacks and the gloomy outlook added to jitters about military strikes on Iraq.
The Dow Jones Industrial Average fell 201 points on Wall Street last night and City watchers were forecasting another slide in the US later today.
The FTSE almost reached 4500 last month after tumbling to a near six-year low of 3777.10 at the end of July.
Martin Dobson, head dealer at NatWest Stockbrokers, said he believed the slide today was “a general drift, it’s nothing fundamental”.
He added that George Bush’s powerful stance on Iraq was likely to add to the stock market volatility in the short term.
He said: “Sentiment has obviously become weaker on the back of it and there’s going to be a mood of uncertainty until there’s actual action.”
EGi News 13/09/02
