Footsie ends week on five-year low

The slide in European markets continued today as the FTSE 100 Index registered its lowest close for more than five years.

Another turbulent week - in which the London market sustained losses in four out of the five sessions - ended with the Footsie 94 points lower at 3781.

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Renewed fears about the US economy and the future of banking giant Citigroup in particular caused the latest dive in share prices.

David Jones, chief market strategist at IG Index, said he feared the sell-off would continue into next week.

He said: "Many investors are now feeling it is a question of when, and not if, the index returns back to the last bear market lows of around 3300 in March 2003."

The London market spent much of today's session in positive territory, helped by a rare session of gains for banking and mining stocks.

But Wall Street's opening unnerved investors and prompted a swing of more than 200 points in the performance of the FTSE 100 Index.

Normally defensive stocks, such as pharmaceutical companies AstraZeneca and GlaxoSmithKline and utilities firm Scottish & Southern Energy, led the latest sell-off.

Meanwhile speculation over US banking giant Citigroup continued today amid reports it may consider moves to sell parts of the company or seek a merger.

A board meeting was due to be held today as executives react to the recent slide in Citigroup's shares, which have hit their lowest level in 15 years.

The group's board are said to be looking at a range of options, including auctioning off pieces of the business, or even selling it outright.

However, Citigroup yesterday insisted it had "a very strong capital and liquidity position and a unique global franchise".

Prince Alwaleed bin Talal, a long-time investor in the group, also said he would increase his stake in the bank to 5% from less than 4% and expressed "his full and complete support" of the bank's management - including Vikram Pandit, who has been chief executive for less than a year.

But the falling share price led analysts to predict the group would still need to raise more cash from outside investors to calm its shareholders.

Peter Kenny, managing director in institutional sales at Knight Equity Markets said the Prince Alwaleed announcement was "not a significant strategic investment statement".

He added: "And the question Wall Street is asking is, is this good money after bad?"

Earlier this week, Citigroup announced 52,000 job losses around the world, with the company's City operation expected to be hit heavily.

The company employs around 12,000 people in its UK businesses, the majority in London and Derby, where its online bank Egg is based.

Yesterday, Citigroup stock was down about 84% since the beginning of the year and about 92% from its trading record in December 2006.

It is considered the most vulnerable among the major US banks, failing to turn a profit in the past four quarters when rivals such as JPMorgan Chase and Bank of America managed to do so.