The FTSE 100 bounced back into the green at the open, and above the 6,000 mark, before falling back to hover at around 5961 by late moring.
It follows a catastrophic day yesterday when the index measuring the value of Britain’s largest companies shed billions of pounds in value and closed down by almost two per cent, after China’s stock markets plunged seven per cent and closed for the second time in a week.
The losses came amid a stark warning by the Chancellor over the threat to the economy.
Speaking in Wales yesterday George Osborne said: “Last year was the worst for global growth since the crash and this year opens with a dangerous cocktail of new threats from around the world.”
He added: “Anyone who thinks it’s mission accomplished with the British economy is making a grave mistake.”
Policymakers in China, the world’s second largest economy, have now axed the ‘circuit breaker’ that automatically stopped trading when steep losses were being measured, believing the system could have been heightening panic.
Market intervention by governments or authorities usually sets alarm bells ringing among traders and prompts further selling.
Yesterday renowned investor George Soros warned the panic sparked by China was the start of an economic crisis, similar to 2008.
Full article: FINANCIAL WARNING: More TURMOIL expected as Chinese markets MELTDOWN to continue (Express)