City hit by shares plunge

Another £37 billion was wiped off the stock market value of Britain's leading companies today amid concerns about the fragility of the global economic recovery and more bad news from corporate America.

The City's main blue-chip index, the FTSE 100, dived below the 4000 mark, although it later rallied to 4014.1 - leaving it down 70.8 points down on the day.

After languishing all morning, a profits warning from US communications giant Lucent accelerated the slide. The firm said it expected a 20 per cent to 25 per cent drop in fourth-quarter revenues. "The Lucent warning has just tipped the Footsie over the edge," said one dealer. Worries that Iraq and the US are on a collision course to war were also feeding investor pessimism.