Domestic and international worries returned to haunt London stocks yesterday, driving all the main FTSE indices sharply lower. At the finish of a fraught session, the FTSE 100 index was 61.4, or 1 per cent, lower at 6,113.4, extending the loss over the past two sessions to 121.4 points, or 1.9 per cent. The other FTSE indices suffered similar losses with the FTSE 250 closing 48.9, or 0.9 per cent, down at 5,682.8, and the FTSE SmallCap 22.4 lower at 2,660.6, a fall of 0.8 per cent on the day.
On the international front, US bonds, which fell sharply on Tuesday amid worries about dollar weakness, were struggling to hold steady, while stocks on Wall Street, where the Dow Jones Industrial Average retreated 231 points on Tuesday, came under renewed fire.
On the local front, more worrying economic news, widely viewed as increasing the pressures for another rise in domestic interest rates, brought further gloom for the stock market.
Dealers said that as well as the prospect of rising British interest rates, investors were concerned about the chances of similar moves in the euro zone and the US. The European Central Bank meets to debate rates a week today while the US Federal Reserve's open market committee assembles on November 16th. Turnover came in at 1.04 billion shares, and was again said to have been boosted by programme trade activity.
