The FTSE100 has entered ‘bear market' territory after being smashed in early Tuesday trading, down 129.20 points (2.34%) to 5383.50.
London’s blue-chip index this morning dipped more than 20% below its 6730.70 peak, the typical bear market gauge.
Most of the negative sentiment surrounds the British Chambers of Commerce’s Q2 economic survey, which showed the UK is on the brink of recession.
No stocks are currently in the black so far, with the London Stock Exchange Group 8.66% lower to 659.50 and Kingfisher 5.80% behind to 92.60.
In New York, a Friday break for Independence Day brought little joy for the Dow Jones IA, closing Monday 56.58 points (0.5%) lower to 11231.96.
San Francisco Federal Reserve Bank president Janet Yellen smashed investor confidence saying the housing market downturn and the credit crisis could worsen before the recovery.
Financials were hit hardest by the news, with Bank of America down 3.88% to 21.53, JPMorgan Chase 3.6% lower to 34.04 and Citigroup 2.5% behind to 16.40.
Pharmaceutical giant Merck was the worst of the blue-chips, closing 4.81% down to 36.60.
Aluminium producer Alcoa had a better day at the office, 1.86% higher to 33.39.
In Tokyo, the Nikkei 225 index followed a host of Asian indices lower on Tuesday as concerns in the US spooked Japanese investors. The Nikkei 225 Stock Average fell 326.94 yen (2.45%) to 13,033.10.
Elsewhere in Asia, Hong Kong’s Hang Seng dipped 705.40 (3.22%) to 21,207.66 and Taiwan’s Taiex plummeted 289.26 (3.94%) to 7,051.85.IFAonline
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