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FTSE 100 bounces back

30/09/2008

The FTSE 100 bounced back by lunchtime to 4,847.37, 28.6 points higher than last night's close.

Confidence that a deal will be made in the US, despite Congress's initial rejection of the bill last night, in addition to rumours of interest rate cuts, helped boost the FTSE by early afternoon.

The blue-chip index opened at 4,784.53 and had dropped to 4,675.77 by 08:15 BST, losing another three per cent in value from last night's close.

The nationalisation of Bradford & Bingley had sent the FTSE 100 below the 5,000 mark when it opened yesterday but the rejection of a rescue bill last night sent markets crashing all over the world.

Stocks across all industries were affected, although insurers have fared slightly better this morning with a 3.03 per cent rise for RSA Insurance Group and 1.61 per cent increase for Standard Chartered in early trading.

Broker firm Icap led the decline with a 23.58 per cent drop after admitting uncertainty over this year's profits for the first time, but had gained 13.3 per cent by 12:47 BST.

Man Group, the listed hedge fund, followed Icap with a fall of 18.26 per cent but was also up, by 4.42 per cent at lunchtime.

The US markets saw their worst day since 1987 yesterday, with Standard & Poor's 500-stock index plunging almost nine per cent and the Dow Jones Industrial Average down almost seven per cent.