Experts see 'a lot of fear' among investors, as concerns over the health of the financial system and global economy send shares down once more.
The FTSE 100 extended this week's losses yesterday, as deep gloom over the UK's prospects of economic recovery from the credit crunch induced downturn prevailed among investors.
London's flagship stock exchange closed 3.14 percent down on the day at 3,512 points. This adds to Monday's retreat of 5.2 percent.
A trigger for this week's share sell-off among investors has been the spate of negative earnings announcements from large British banks. Last week, RBS and HBOS announced 2008 losses of £24 billion and £11 billion respectively.
On Monday, HSBC, previously thought by analysts to have remained relatively unscathed by the financial turmoil, revealed that annual profits had fallen by 60 percent. The gloom deepened on news that US insurer AIG had suffered a national record corporate loss for the final three months of 2008.
The US markets subsequently hit 12-year lows, while the Nikkei 225 in Tokyo retreated close to a 26-year low.
Speaking to the BBC, Lucinda Chan at Macquarie Private Wealth said: "There's just a lot of fear driving the markets right now. The market is consumed by the global sell-down at the moment, and I think there's going to be more pain before there's a turnaround."
