FTSE opens higher as Wall St pares losses
The index of leading shares opened up 0.3%, or 21.19 points, at 6,976.39 and FTSE 250 has a similar 0.3% rise.
US stocks closed lower but recovered most of their earlier losses which saw the Dow Jones at one point fall by more than 500 points.
The index closed 125.98 points, or 0.5%, lower, while the S&P 500 lost 15.19 points, or 0.55% and the Nasdaq Composite 31.09 points, or 0.42%.
Earlier worries over slowing global growth and tensions over Saudi Arabia were compounded by a warning on rising material costs from Caterpillar, the US construction equipment company seen as a bellwether for the US economy.
Equity losses in Asia were modest. Hong Kong’s Hang Seng fell 0.3% while the Shanghai Composite Index retreated 0.6% and Japan’s Nikkei lost 0.35% handing back earlier gains.
European stock markets also fell sharply after the European Commission’s unprecedented intervention into the Rome government’s spending plans.
The EC has told the populist Italian administration to revise its budget as it is worried about the impact of higher spending on already high levels of debt in the country, the eurozone’s third-biggest economy.
Italy’s governing parties have vowed to push ahead with campaign promises including a minimum income for the unemployed. The government now has three weeks to submit a new, draft budget to Brussels.
The FTSE 100 slid below 7,000 and closed 87 points lower at 6,955.21, or 1.24% down. It has dropped 7% since the end of September, setting it on course for the worst month since May 2012.
Germany’s DAX closed 2.2% lower at 11,274.28 while the key Paris stock market index ended 1.7% lower at 4,967.69
Investor morale in the UK is at its lowest level in at least 23 years, according to the financial services firm Hargreaves Lansdown’s confidence index.
Laith Khalaf, a senior analyst at the firm, said the constant drip-feed of Brexit news has had a negative effect on investor confidence.
“Investors are in grim mood, as time is running out on Brexit negotiations with little progress on show,” he said.