THE bloodbath on the Stock Exchange continued yesterday as billions of pounds were lost with global recession fears panicking investors.

London's FTSE 100 Index of top shares suffered another day of carnage, closing last night below the 4000 mark for the first time in five years, at 3932.1 - a fall of nearly 9% which followed big drops across markets in Asia the night before.

It ended the index's worst week since Black Monday in 1987, with the FTSE seeing a slump of 21%, wiping more than pounds 250bn off the value of the UK's top companies. And the US provided no relief as the Dow Jones index fell by as much as8%during early trading. Just before the close bargain hunters lifted it to 8451.19, down only 128 or 1%, on the day.

Banking shares again suffered, with anxieties over the billions they need to dig themselves out of their collective black hole. It was a similar story in the financial centres of Europe as billions of euro were lost on the French and German stock exchanges.

Finance ministers representing the G7 group of the world's richest countries are holding crisis talks over the weekend.

Chancellor Alistair Darling warned last night that it was "essential" that the world's leading economies took action to stabilise financial markets.

Meanwhile, Welsh Secretary Paul Murphy said Welsh public authorities have to wait until the middle of next week to learn how much cash, if any, they could get from governments in Westminster and Cardiff Bay after the collapse of Iceland's banks.

Several Welsh councils and three police forces have more than pounds 66m frozen in the accounts of the collapsed banks and there is no certainty that they will get the money back.

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