The global panic following the bankruptcy of Lehman Brothers deepened today with another sharp fall on the London stock market and heavy losses across Asia.
As investors continued to reel from yesterday's high drama, the FTSE 100 index tumbled by as much as 102.8 points this morning to 5101.4, nearly a 2% fall. This brought more gloom to shareholders following yesterday's 3.9% plunge.
With analysts comparing the implosion of Lehman Brothers and the rescue takeover of Merrill Lynch to the crash of 1929, chancellor Alistair Darling this morning said it was vital that the world's central banks acted together to provide stability. Shortly afterwards, the Bank of England pumped another £20bn into the markets to avoid liquidity freezing up again.
Darling was speaking after shareholders in Japan and China, where markets were closed yesterday, caught up with the unprecedented upheaval in the financial world. The Nikkei index fell by almost 5% and the Shanghai index lost 4.3%.
With most Lehman staff having cleared their desks, attention has turned to AIG, the US insurance giant. Its credit ratings were cut yesterday, adding to fears that it could become the next victim of the financial crisis.
With UK inflation hitting a new high of 4.7% this morning, and the price of US crude oil also falling sharply again to $91.54 a barrel, market analysts predicted another grim, nervy day on the London stock exchange.