English/Nat
London continued to brave a meltdown on global stock markets on Tuesday as they suffered their most drastic crisis since 1987's Black Monday.
The market braced itself for the worst as Wall Street reopened at 1430 G-M-T, following the seven per cent slide that triggered its early closing on Monday.
The U-K's Financial Times Stock Exchange 100 index of British blue chips fell by more than nine per cent in the first half hour of trading.
At 1240 G-M-T the FTSE 100 had dropped by 6.69 per cent - down 324 points at 4-thousand-516 after falling more than nine per cent early in the session.
Analysts cited turmoil in Hong Kong as the main trigger, although they said a meltdown was waiting to happen, with stock markets in general being overvalued.
London braved a meltdown on global stock markets on Tuesday, and the FTSE 100 index of Britain's leading shares responded with a slide of nine per cent to historic losses on Wall Street.
The FTSE 100 fell 9.31 per cent, or 450 points to 4-thousand-390 by 0855 G-M-T.
That compares with the previous record fall of the "footsie" of 250 points on Black Monday, October 19th, 1987 - a drop that wiped out 12.5 per cent of the index's value.
The London Markets Regulatory chief said the most important thing in this situation was the liquidity of financial institutions.
SOUNDBITE: (English)
"Obviously the concern that we would have is liquidity because a fall in prices on the stock market, while unfortunate for the holders of shares, doesn't necessarily carry any consequences for anyone else accept for those holders. But of course you have to be sure that liquidity is available to institutions, and in a fast-moving situation, and so that would be the main focus of our attention."
SUPER CAPTION: Howard Davies, London Markets Regulatory Chief
By late on Tuesday morning the FTSE 100 index had almost halved its steep opening decline, but it was still down some five per cent on the day following nervousness over the deepening global market sell-off.
By 1240 G-M-T the FTSE 100 had dropped by 6.69 per cent - down 324 points at 4-thousand-516 after reaching a low of 4-thousand-382.8 early in the session.
But the head of dealing at NatWest stockbrokers said it was more of a stock market correction than a crash.
SOUNDBITE: (English)
"It sounds very glib of me to say that we would consider it to be a correction. Even at worst when it was 450 points down this morning we're talking about ten per cent or so which is less than half the level it was in '87 which is generally accepted to be a crash, so we maintain that the market itself is strong, the economy is strong, and we are looking at a correction here."
SUPER CAPTION: Richard Hunter, Head of Dealing, NatWest Stockbrokers
At Citibank, early trading was frantic.
Analysts say that although the fundamentals are different to those in 1987, when the Dow crashed 22.6 per cent, there are still serious ramifications to the current crisis.
SOUNDBITE: (English)
"I'm sure the financial media will be writing this up as Black Tuesday, but certainly this is an important event for investors and stock markets given the very sharp declines that we have seen globally."
SUPER CAPTION: Neil Mackinnon, Chief Economist, Citibank
As traders continued to battle with fluctuating prices, British Chancellor of the Exchequer (Finance Minister) Gordon Brown said governments must be vigilant at times of sudden changes in financial markets.
SOUNDBITE: (English)
SUPER CAPTION: Gordon Brown, British Finance Minister
The U-S dollar suffered sharp losses against the Swiss franc and against the mark, but it held up well against the yen.
Bond markets were buoyant as investors rushed into low risk territory.
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