Footsie battered by Japan nuke fear
Ongoing fears over Japan's nuclear crisis sent the FTSE 100 Index slumping to its lowest level for more than three months yesterday.
Jittery investors headed for the exit as they were swamped by grim global news, with reports of unrest in Bahrain and disappointing US economic news adding to the Japanese worries.
London's FTSE 100 Index plunged another 1.7% or 97.1 points to 5598.2, while America's Dow Jones Industrial Average fell by 1.4% after disappointing economic news and reports of fresh warnings over Japan's nuclear plants.
Traders reacted to reports of fresh comments by EU energy minister Gunther Oettinger that Japan's damaged nuclear plant was "out of control", before it transpired the comments were made yesterday and were not based on new or privileged information.
US figures revealing new home construction fell to the second lowest level on record last month compounded the late- session sell-off.
The Footsie is now trading at its lowest level since the end of November, with more debt worries for Portugal and higher unemployment rates in the UK also weighing on sentiment.
Blue chips had shown signs of steadying after a 6% rebound for Japan's Nikkei 225, but any progress was short-lived.
The Nikkei rallied after panic selling in the wake of the country's earthquake, with Japanese car makers and financial companies the main beneficiaries of the rebound.
This restored confidence in early London trading, however news that Moody's cut Portugal's debt rating caused heavyweight UK banks to slump and a poor opening on Wall Street put paid to any bounce back.
HSBC closed down 23.5p to 622.5p and Barclays, which has a high level of exposure to the Iberian peninsula, was down 10p to 282p.
While the civil war in Libya rumbles on, there were fears that the crisis could spread to Bahrain after the Gulf state declared a state of emergency and Britons were urged to leave.
Brent crude oil prices, which have eased in recent days, rose 2% to 111 US dollars on fears that production could be disrupted.