The FTSE 100 plunged deep into a bear market today as oil prices soared to record highs.

Blue-chip stocks dropped by by 145.2 points to 5261.6, their lowest point this year and a level not seen since October 31,2005 as investors continued to sell shares.

Even a strong trading performance by mining and oil stocks on the back of spiralling oil prices, which jumped $5 to a record high above $147 a barrel, was not enough to keep shares out of the grip of the bear market.

The FTSE 100 rebounded slightly to 5337, but remained below the 5384 threshold that marks a 20 per cent fall from the market peak in June last year.

Mike Lenhoff, chief strategist at Brewin Dolphin, warned that shares could fall further to between 5,200 and 5,000.

"Clearly we are in a difficult time, and until we can see some stability in financials, the market will have trouble recovering and sustaining any recovery," he said. " The Bank of England needs to cut interest rates."

Today’s share price falls follow a 2 per cent plunge yesterday, as investors sold equities after the Bank of England kept interest rates on hold at 5 per cent.

The FTSE all-share index also retreated further into bear territiory, falling by more than 30 points. Based on the all-share losses since last June, the bear market has lasted for 63 weeks, longer than four of the five previous bear markets in the past three decades.

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