Recession fears rise as stock markets fall

by Richard Kilner

Story link: Recession fears rise as stock markets fall

Mounting fears of recession on both sides of the Atlantic and large losses from the credit crunch contributed to share prices tumbling sharply in both New York and London.

The FTSE 100 plummeted to 6,025.6, losing 190.1 from its value in a single day, the largest such loss since August.

A number of British firms saw losses of 5% or more, including RBS.

Meanwhile the Dow Jones had 277.04 wiped from its value, reaching 12,501.11.

The tumbling share prices followed in the wake of bad news from Citigroup’s and mounting fears of recession after retailers suffered worse than expected December sales.

Citigroup’s shares lost over 7% of their value amid revelations that thousands of jobs were to be shed and $14.5bn had to be generated from external sources to try and make up for a monumental writedown of $18bn.

The massive bank’s losses were twice the size that had been expected.

Last week the Federal Reserve’s chairman, Ben Bernanke, had raised the prospect of a significant cut in basis points, seen by some as a good move, but causing others to see it as a worrying sign of panic from the Federal Reserve.

An eclectic mix of UK sectors have seen their shares declining rapidly, with affected sectors ranging from housebuilding to retailing.