Shares plummet to record low

Ben Griffiths|Pa12 April 2012

The FTSE 100 index of leading shares closed down for the ninth consecutive day today, a record since the index began in 1984.

Bluechip shares lost 55.8 points to close at 3622.2, its lowest level since December 19, 1995, as continuing fears over war and the economy sent investors running for cover.

Market strategists now fear the index could fall through the critical 3,600 level and warn that Friday's trading will be crucial.

A host of heavyweight shares weighed on the market with banks, telecoms and oil stocks all heading lower.

Bob Semple, strategist at Deutsche Bank, said: "The thing that is puzzling about the UK is that economic data has not been that bad. London is having a much tougher time than anywhere else. It is unclear why we are being singled out."

Yesterday's slump of 58.7 points extended the Footsie's run of consecutive falls to match the unprecedented eight-day losses endured in December.

Over the last nine days, the index has shed almost 9% of its value. This compares with a peak of 6930 touched in December 1999 at the height of the dot.com bubble.

Investors fear the looming war would end up costing the British economy dearly and damage the global economy.

Hilary Cook of Barclays Capital said: "There are just no buyers coming into the market. Nine days on the go is not expected and implies a continual drip of bad news.

However much you argue that shares are cheap, there are no buyers."
Gold prices continued to rise as investors rushed for a port in the storm.
Yesterday prices for the precious metal busted the 360 dollars an ounce barrier for the first time in almost six years.

The price touched 367.60 dollars per ounce before closing at 364.70 dollars in London this evening.

Kamal Sharma, currency strategist at Commerzbank, said: "Gold has always been seen as a safe haven. Underlying war fears are behind this rise and these are the same fears that have been driving gold up for some weeks."

Gold has soared more than 14% in the past 60 days and is poised to rise further amid growing nervousness that a report from United Nations weapons inspectors due to be published on Monday might trigger a US-led war on Iraq.
Britain's life insurance companies will be beginning to twitch as the Footsie heads further south.

Analysts have warned for months that the life firms risk breaching solvency requirements if the index falls below 3500 points, a move which would have a knock-on effect for policyholders.

Martin Dobson, head trader at NatWest Stockbrokers, said he feared the Footsie could now drift to 3500.

"It's six days until the next weapon inspectors report and at this point I can see us going below 3500," he said.

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