The FTSE drops again, with writedowns from HBOS and the Senate's bailout rejection knocking investor confidence.
The vote against a financial bailout package for large car manufacturers in the US Senate has led to the FTSE 100 retreating sharply this morning.
As of 10:02 GMT, the index was down 3.1 percent to 4252.67 points. Similar falls were marked on stock exchanges in Paris and Frankfurt.
Yesterday, the American lawmakers refused to back a £9.4 billion plan to help out struggling Detroit-based firms GM and Chrysler. The Senate's decision effectively makes the risk of either or both carmakers going bankrupt higher - events which could lead to the losses of hundreds of thousands of jobs.
Separately, struggling UK mortgage lender HBOS said that it would be writing down £5 billion on its loan book. The pound had also hit another all-time low against the euro on currency exchanges yesterday, signalling a lack of investor confidence in the UK.
Speaking to the Daily Telegraph, David Buik at BGC Partners commented: "It's a bad day because of uncertainty and uncertainty is the most toxic experience you can have. I think we are going to see a general markdown… I'm full of woe and fear because there’s no real good news."
Mr Buik added that he thought there would be "huge cuts" by the US carmakers as a result of the global downturn. "Jobs will go everywhere," he said.
