FTSE falls for eighth day

 

Growing fears that the world will slide back into recession have triggered London's blue chip shares index's longest losing streak for eight years.

The FTSE 100 Index fell 67 points to 5139.8, its eighth day of losses in a row, and its worst run since January 2003 when markets were gripped by recession fears after the dot-com bubble burst.

Today's falls came as data revealed that China's manufacturing sector contracted in October, adding to fears that the eurozone will collapse under its debt mountain and politicians in the US will fail to reach agreement on a deficit reduction plan.

Banks were among the biggest fallers, with taxpayer-backed Royal Bank of Scotland down 6% to a fresh two-and-a-half-year low.

Fears over the eurozone debt crisis escalated when a German debt auction attracted surprisingly weak interest.

This was taken as a sign that Europe's biggest economy is not immune to debt crisis ripping through the currency bloc and triggered fresh worries that contagion is spreading to the stronger nations helping to keep the euro afloat.

Meanwhile, there were further fears that France could suffer a credit ratings downgrade amid speculation it will have to absorb more of the losses from the failed Dexia bank.

Yusuf Heusen, a trader at at IG Index, said markets were "steeped in gloom" and "the barrage of bad news shows no sign of relenting".

He added: "This morning's poorly received German bond auction was the latest reminder as to just how nervy investors are over the eurozone debacle.

"With overnight news of manufacturing in China slowing too, the real risk is that we're standing on the brink of a full-blown global recession."

PA

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