Renewed fears that the economic and financial crises affecting Brazil might quickly envelop other Latin American countries and also switch continents - with China now seen as a target - brought more hefty losses in London's equity market yesterday.
And the market also had to contend with the possibility that it might not get another British interest rate cut after the next meeting of the Bank of England's monetary policy committee.
Those doubts about rate cuts came after news that the first estimate of British gross domestic product for the fourth quarter of 1998 showed a 0.2 per cent increase for a year-on-year figure of 1.6 per cent. That compared with consensus forecasts of 0.1 per cent and 1.5 per cent.
At the finish of a gloomy session, the FTSE 100 had dropped 161.7 or 2.7 per cent to 5,861.2. Yesterday's slide finally erased all the gains recorded earlier in the week when the index came within 55 points of its all-time closing high. Over the week the index fell 79.8 or 1.3 per cent.
The second and third-line stocks escaped the worst of the setback, but nevertheless posted hefty losses. The FTSE 250 finished 46.7 lower at 4,829.1 and the FTSE SmallCap dropped 12.2 to 2,093.1. Over the five days the 250 showed a 28.0 or 0.6 per cent decline and the SmallCap gave up 6.97 or 0.3 per cent.
Turnover sped past the one billion shares mark for the ninth consecutive session, eventually reaching 1.3 billion.
