US and European equity markets suffered another day of losses on signs of a worsening ‘credit crunch’.

On Wall Street, the Dow Jones Industrial Average fell by 387.2 to 13270.7, the Nasdaq fell by 56.5 at 2556.5 and the Standard & Poor’s 500 dropped by 44.4 at 1453.1.

The FTSE 100 shed 1.9% to close down 122.7 at 6,271.2, wiping out its entire gain since the start of the year.