UK: Shares plunge £29bn amid economy fears

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Shares plunge £29bn amid economy fears

More than £29 billion has been wiped from the value of Britain's biggest companies as fears about the health of the global economy gripped investors Shares tumbled in the City as waves of possible job cuts and yet more losses on Wall Street added to the gloom in London.

By the close, the FTSE 100 Index was off 127.0 points at 4721.7, and analysts predicted it could get worse before shares start to pick up.

Much is likely to depend on US investors who, in the third day of trading since last week's terror attack, sparked another sell-off.

The Dow Jones Industrial Average lost more than 225 points in the first two hours of trading, following Monday's record points fall.

The falls added to the downward momentum in London with a host of blue-chip companies seeing their market value taking a further hit.

Simon Rubinsohn, chief economist at City stockbroker Gerrard, said: "People are standing on the sidelines. Technically, there should be some support but people are reluctant to buy at the moment given the economic and political background."

US aerospace giant Boeing set the tone for the day's session by announcing it may have to axe 30,000 staff as a result of the disruption caused by last week's events.

German carrier Lufthansa also knocked confidence, saying it would have to cut jobs and may not be able to afford to buy 15 Airbus superjumbo jets.

The news contributed to a slide in Airbus partner BAE Systems' shares, while British Airways also continued to fall, hitting a fresh low of 163p.

http://www.thisislondon.co.uk/html/news.html

-- Martin Thompson (mthom1927@aol.com), September 19, 2001


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