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Black Thursday on Stock Market

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by Kay Mitchell

Nearly £70 billion was wiped from the value of the UK’s leading 100 firms — the biggest decline in over 4 years. The fall was triggered by 2 weeks of uncertainty in world stock markets sparked by a US housing market crash and experts have forecasted that the chaos could send repercussions through the economy.

Thousands of homeowners have defaulted on mortgage payments after rising interest rates.

As US mortgage lenders have sold on these debts to other big investors no one knows who faces the biggest losses — sparking fears of a wider financial crisis.

Yesterday, the FTSE-100 plummeted 4.1%. It dropped 250 points to 5,859. A spokesperson for GFT Global Markets commented that panic selling is setting in due to nervous market conditions.

The Government reassured consumers, Chancellor Alistair Darling, remarked that the Bank of England, along with all other central banks, has made it evident that if it is necessary they can make sums available. Interestingly, in this country, no institution has approached the Bank of England. They have in Europe, America and Japan.

America’s equivalent of the Bank of England, The Federal Reserve, pumped nearly £9billion into money markets to try to re-establish confidence.

Yesterday’s fall means the value of Britain’s top 100 companies has plummeted by £242 billion — more than £4,000 for every Briton — since the FTSE-100 hit its high in June 2007.

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News posted: August 17, 2007

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