The FTSE100 plunged under the 5,000 barrier for the first time since June 2005 this afternoon while the US market fell on more bad news from AIG.
The UK’s index of leading stocks was 215.10 points (4.13%) lower at 2.15pm, to sit on 4989.10.
HBOS’ nosedive continues, currently 35% down to 151.20p. RBS is also in sharp decline, 15.4% behind to 178.1p. Just two companies, Centrica and National Grid, are up more than 1%.
Paris’ Cac40 is 2.93% lower this afternoon, while Frankfurt’s Dax is down 2.87%.
European financial stocks are also feeling the pinch – with Commerzbank, Allianz and Credit Agricole all more than 10% behind.
Wall Street has also opened lower on Tuesday; the Dow Jones is currently 1.4% down to 10,765.66.
In the US, Insurer AIG fell 45.38% as markets opened this morning following four downgrades of the group’s debt rating. The S&P 500 fell 2.26% or 28 points to 1,223.
The bottom three losers in the S&P500 were all financials with Morgan Stanley second behind AIG, down 18.02% to $26.39 and Fannie Mae losing 15.10% to $0.52.
Goldman Sachs also has a bad start falling 10.11% as its third quarter results failed to set the market alight.
However, Lehman Brothers and Merrill Lynch both rose today after disastrous days yesterday, up 7.19% and 4.87% respectively.
Bank of America, which is set to acquire Merrill Lynch, is currently the top stock on the Dow Jones, up 6.10%.
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