The City: 'Getting drunk won't help because there is more to come'

Cold rain was falling on an overcast London yesterday but the City was feeling the heat from mid-morning when the FTSE 100 index started to slip into freefall.

As stock indexes around the world posted their biggest slides since 11 September 2001, experts spoke of a "horrible" and dramatic day on the trading floors against the backdrop of a looming US-led global downturn.

One London trader, Jaweid Afsar, of Securequity, said the day's events were "very, very nerve-racking". The FTSE turned into a red blur during what Tim Hughes, head of sales trading at IG Index, described as an "incredible day of trading" as Europe faced the repercussions of severe Asian losses overnight.

Meanwhile in Frankfurt a dealer described how a "mass sell-off" across Europe was following the US jitters. "Pure panic is ruling here," he said.

Christoph Lindner, a trader at Baader Bank, agreed. "This is awful," he said. "This is a Black Monday."

"I was sitting here between 9am and 2pm, and in principle the only thing I got was sell orders," said Stefan Kaiser, a trader at the Frankfurt brokerage NM Fleischhacker. He added: "Getting drunk won't help because there'll be more of the same tomorrow."

In the US the markets were closed for a national holiday in memory of Martin Luther King. But across the border in Canada, it was the same grim story. Toronto's main stock market index plunged more than 500 points to its lowest level in more than 14 months. "It's pretty ugly, but we're just following the global pattern," said Paul Hand, managing director at RBC Capital Markets. "It's all fears of more financial stress given the model lines and the overlay of a potential recession."

Traders in Mumbai, India's financial capital, watched a giant screen in horror and disbelief yesterday as sharesin the country's leading stock index appeared to be heading for its biggest single-day loss.

Another trader, Andrew Clarke, at SG Securities, said: "It is no longer a question of avoiding recession in the US any more. It is a case of damage limitation, because the damage has already been done. The [US authorities] now have to get on and act fast."

"You can conclude that this morning was panic-selling," said Rik Zwaneveld, a trader at AFS in Amsterdam, where the market's fall reached its lowest point at about 2pm. "For the moment we have seen the lows, but that does not mean all the clouds are out of the air. The pain is mostly with the financials and everyone is still afraid."

And in Hong Kong, Francis Lun, of Fulbright Securities, summed up the mood of every trader the world over, commenting simply: "It's another horrible day."

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