Yesterday the index suffered its worst one-day sell off, closing at a four-year low of 4,589.
After opening at 4,606, UK banks suffered sharp falls as investors anticipated a dilution of their holdings. Royal Bank of Scotland is down 30 per cent to 104p per share following reports that it had approached the UK government for additional funding. Lloyds TSB is also down 9.27 per cent to 235p and Barclays is down 8.36 per cent to to 287.5p.
BDO Stoy Hayward Investment Management economist Catherine MacLeod says: “Markets are responding incredibly negatively to the proposed political actions over the weekend, both in the US and in Europe. The failure of politicians to agree on concerted action highlights their inability to grasp the gravity of the situation or to focus on solutions to the problems at hand.”