FTSE hits three-year lows

The FTSE 100 index of leading UK shares climbed back above the psychologically important 5,000 level on Monday, with just half an hour of trading to go.

The index closed at levels last seen in October 1998, in the aftermath of the Asian financial crisis, having spent much of the afternoon hovering above the 4,900 mark.

By early afternoon, about £40bn had been wiped off the value of Britain's biggest companies.

But opening rises on Wall Street lent support to London stocks, taking the FTSE 100 back up to close at 5,033, down just 36.6 points on the day.

Wall Street direction

London often takes direction from the US markets.

But there was great uncertainty on Wall Street on Monday, with the Dow Jones Industrial Average swinging wildly between both losses and gains before closing the day flat.

There is nothing in terms of good corporate news for investors to cling on to

Alex Scott, Barclays Stockbrokers

But the indication of some upside from the US, helped the FTSE 100 index to finish with an upward spurt even though it still ended lower than the previous close.

The index has lost 19% so far this year.

The sharp falls on world markets seen in the past few days have been prompted by worse than expected US unemployment data.

A series of gloomy economic indicators and poor company results have also dragged down share prices as the global slowdown spreads.

Asian and other European markets were also lower in Monday trading.

Across the board

Scottish Power led the fallers in London, losing 11% of its value after it warned of $300m (£205m) excess costs at its US Pacificorp unit.

Biggest fallers

Scottish Power
-11.15%

Amvescap -8.43%

Invensys -7.56%

International Power -6.76%

Sage Group -6.44%

Schroders -5.55%