23/09/2011 02:58 BST | Updated 22/11/2011 05:12 GMT

FTSE 100: Shares Index Braces Itself For Another Rocky Day

PRESS ASSOCIATION -- London's leading shares index is braced for another rocky day after panic over the state of the global economy triggered its biggest fall in nearly three years.

The FTSE 100 Index closed 4.7% or 246.8 points lower at 5041.6 on Thursday - wiping £64 billion from the value of Britain's biggest companies.

The slump - the biggest points fall since November 2008 - came after America's central bank delivered a gloomy view of the economy and failed to inspire traders with its latest emergency measures, which included a process dubbed Operation Twist.

The US Federal Reserve's warning that there were "significant" risks to the world's biggest economy was joined by disappointing manufacturing figures from Asian powerhouse China and the eurozone.

Meanwhile, Britain joined forces with five other G20 countries to call for decisive and co-ordinated action from the world's leading nations to help the global economy recover from recession.

Global markets had surged in previous days on hopes that the Fed might embark on a third package of quantitative easing, but Operation Twist, designed to keep US interest rates lower for longer, was met with world-wide disappointment

The gloom impacted on the Asian markets, with Hong Kong's Hang Seng index falling 2.3% and South Korea's main Kospi index plunging 4.8% in early trading.

Pacific markets were also hit by sharp losses with Australia's Asx shedding 1.4% and New Zealand's NZX 50 index down 1.8. Financial markets in Japan are closed for a national holiday.

The slumps followed similar market drops across Europe and America on Thursday.

The Dax in Germany dropped 5% while France's CAC-40 fell 5.3% as a similarly shocking performance unfolded on Wall Street, where the Dow Jones Industrial Average was 3.5% lower.