The stock market suffered wild fluctuations in early morning trading today, dipping 200 points on opening and recovering as investors snapped up bargain shares.

The sudden drop in shares sparked rumours this morning that global central banks, including the Bank of England, could be considering co-ordinated emergency rate cuts.

"Rumours of emergency rates cuts ahead of the US open are already circulating," said Steve Pearson at the Bank of Scotland's Treasury.

The opening drop of three per cent was an early indication of another turbulent day to come after yesterday's disastrous slump which saw £75bn wiped off the value of Britain's top 100 companies.

At 11am this morning the unsteady FTSE had stabilised and was running at 5596 after having plunged as low as 5,338.7 upon opening.

Traders will now hold their breath throughout the day until the Dow Jones opens in the US this afternoon.

French and German markets also suffered early losses, following further falls in Asia overnight, sparked by fears of a US recession.

Yesterday the City suffered its biggest falls since 9/11.

Full article here.