Shares hit by new losses

London shares lost early gains and plunged sharply lower again today.

After a tentative rally, the FTSE 100 Index slumped 86.1 points to 3908.4, adding to yesterday's 229.6-point slide.

Yesterday's bloodbath saw the Footsie plunge below 4,000 for the first time since December 1996, and record its biggest one-day fall since the September 11 attacks.

Today, shares rallied 85 points on the opening but the gains quickly petered out.

Traders said the fall was on the back of expectations that Wall Street will open lower again today.

The Dow Jones Industrial Average slumped 440 points at one stage yesterday but managed to pull back to close just 45 points lower.

The late rally meant the Footsie staged a tentative bounce in early trading this morning - rising 85 points.

However the Dow Jones index was expected to fall back again when it opens.

Alex Scott, analyst at Seven Investment Management said: "Really it is investors looking at US futures, which are down - so the market is falling in anticipation of a weaker opening in New York."

He said the low inflation data was also an influence.

"To an extent, what low inflation tells us is that companies are not able to raise selling prices, which doesn't bode well for margins."

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