The FTSE 100 plummeted nearly 9% on Friday reflecting investors’ frazzled nerves despite the banking bailout and 0.5% interest rate cut.
Share prices of Britan's top 100 companies closed at 3932 points, down 381 points (8.85%). In the early hours of trading, the FTSE crashed by more than 10% to a low of 3,874 points. Although the index experienced a brief rally at noon, rising above the 4,000, once the US stockmarket opened in the US it remained depressed around the 3,900 mark.
Early trading in Wall Street saw shares falling sharply, the Dow Jones dipping below 8,000. President George Bush has vowed to "aggressively" tackle the economic crisis.
The falls come a day after the Tokyo stockmarket experienced its worst one-day slump in over a decade. Wall Street has also seen losses every day this week, while in Europe, Frankfurt’s Dax was at one point down 10.57% and Paris’ Cac fell by 9.73%.
Simon Denham, managing director of Capital Spreads, says the huge stockmarket falls reflect the lack of confidence coming into the close of business every day.
He predicted a "complete bloodbath” during the day.
In the US, one of the biggest losers from stockmarket turmoil is General Motors. Speculation is rife that the company, which this week hit its lowest share value since the 1950s, might be forced into administration and with millions of employees worldwide, the impact on the global economy could be severe.