UK NEWS

£84 BILLION WIPED OFF UK SHARES

Fears are growing over a potential US recession

Monday January 21,2008

By Jack Teague for express.co.uk

Comment Speech Bubble Have your say(2)

A STAGGERING £84 billion was wiped off the value of London shares today as the FTSE 100 plunged by by 5.5% - the biggest one-day drop since September 11, 2001.

The FTSE plummeted by 323.5 points to close at 5578.2 as fears grow of a US recession which have sparked a huge global sell-off.

Shares across Europe also dived and Asian stock markets suffered heavy overnight losses as fears over the health of the world’s biggest economy swept through markets across the globe.

This followed Friday’s falls for the Dow Jones Industrial Average on Wall Street, when investors were left unimpressed by the US Government’s tax-relief plans to spur on the economy.

Rumours that Bank of China may become the latest banking giant to reveal a financial hit from the collapse of America’s sub-prime mortgage market also tested investor nerves.

The US stock market was closed for the Martin Luther King one-day holiday, but traders suggested America would be playing catch up when it reopens tomorrow, which could lead to further volatility.

Heavily-weighted banking and mining stocks were worst hit as concerns over a US economic slowdown gathered pace.

HSBC and Royal Bank of Scotland - both with heavy exposure to the US economy - each saw significant losses, falling 48.5p to 712p and 30.5p to 342.75p respectively.

Miners also lost out after a rumoured fresh offer from BHP Billiton for Rio Tinto failed to materialise. Bid target Rio fell 472p to 4228p, while BHP slipped 143p to 1235p.

Peer Vedanta Resources - off 141p at 1591p - also suffered as concerns over faltering global growth weighed on the sector.

Plumbing and heating giant Wolseley was among the early FTSE fallers, losing almost 9% after the company warned of a deteriorating US housing market and falling profits.

But the firm recovered some lost ground as the session wore on to stand 26.5p lower at 689.5p.

Insurer Standard Life meanwhile was on the back foot amid reports that Trevor Matthews, its head of UK life and pensions, was being lined up as the new chief executive of Friends Provident, currently a bid target for a US private equity firm.

While it is thought that Mr Matthews turned down the job last week, shares in Standard Life still slipped 117p to 1482p.

Insurer Friends Provident was one of only four blue chip firms in positive territory after JC Flowers said it was eyeing a reported £4.1 billion takeover. This pushed shares up almost 4%, or 5.5p, to 158p.

In the second tier, Northern Rock led the risers board as the market reacted positively to plans for a private sector rescue for the mortgage lender.

Shares were up more than 46%, or 29.75p, to 94.25p, with the Government’s proposed financial support package significantly boosting hopes of avoiding nationalisation.

The only FTSE risers were Friends Provident up 5.5p at 158p, Taylor Wimpey ahead 2.6p at 183.7p, Hammerson up 2p at 1056p and Resolution up 0.5p at 712p.

The biggest FTSE fallers were BHP Billiton down 143p at 1235p, Rio Tinto off 472p at 4228p, Kazakhmys down 114p at 1041p and Anglo American down 238p at 2353p.

SOMEONE ELSE BESIDES ME BELIEVES.............

22.01.08, 7:15am

That the traitor Brown is about to Give away 60+Billion of taxpayers money to his pals by the time any future government makess good on the Rock guaranteed bonds £84billion is probably close.

But never mind I am sure that traitor Brown will have a £500k per annum banking job to walk into like former traitor Blair!

• Posted by: The_Way_I_See_It • Report Comment

SHARES SPIRAL DOWN

21.01.08, 9:56pm

See what happens when prudent"no boom and bust" is not here to look after the money markets, oh why did he go to Asia when he did what with Northern Rock, Mod laptops and EU constitution(oops treaty) staements and debate take place in house of commons, I bet he really wished he was here to guide us poor mere mortals, I leave it to yourselves to form opinion.

• Posted by: Daveyboy • Report Comment