FTSE slides as fear mounts
The FTSE fell 4.7 percent early on Monday, with banking stocks hammered as officials across the globe scrambled to contain the fallout from the escalating crisis in financial markets.
FTSE gains as metals spur minersBy 8:48 a.m. British time the FTSE 100 was down 233.2 points at 4,749.0 after losing 2.1 percent last week, following a 4.3 percent overnight fall in Japan's Nikkei 225 index. No stock was in positive territory on the benchmark index.
Banks were among the biggest fallers with Barclays, Royal Bank of Scotland and HSBC down between 4.7 and 11.9 percent while HBOS was the top loser in the index, falling 14.6 percent.
The treasury minister said Britain is looking at all options on the financial crisis and that it is prepared to take radical action where it is needed.
The Financial Times said Alistair Darling was considering a taxpayer-funded recapitalisation of banks, amid signs of cross-party and central bank support for an effective part-nationalisation of the sector.
"Governments have been getting involved in trying to prop up markets but markets are going to find their own levels," said Richard Hunter, head of UK equities at Hargreaves Lansdown.
Germany offered a blanket deposit guarantee as it clinched a deal to rescue lender Hypo Real Estate at the second time of asking, while regulators from Washington to Seoul took their own steps to ensure the stability of financial firms.
Investors were also concerned whether a $700 billion (398 billion pound) bailout package agreed last week from the United States would be big enough to prevent a global recession.
"The (U.S.) bailout has gone through but there are concerns about how it's going to be implemented and with European banks also in trouble, it's playing on investor jitters," Hunter said.
Other financial stocks were also hit, with interdealer broker ICAP down 4.9 percent, and insurers Old Mutual and Standard Life falling 6.6 and 7.5 percent respectively.
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