London’s leading shares extended their rockiest start to any trading year since the 1970s yesterday as fears of recession in the United States sent the FTSE 100 index below the watershed of 6,000 points in the second consecutive session fall.

The blue-chip bellwether sank by a further 82.7 points, or 1.4 per cent, on the heels of Tuesday’s 3 per cent slump, to end the day at 5,942.9, as investors’ anxieties over global and British economic prospects continued to deepen.

The index has fallen by just under 8 per cent since the start of the year — the worst start to any year since its creation in January 1984.

The gloomy mood among investors worldwide was emphasised by a Merrill Lynch survey showing that, for the first time, many fund management groups see a threat of global recession.

The bleak findings from 195 institutions managing $671 billion (£342 billion) showed that nearly one in five thought that a global recession was “likely” or “very likely” in the next 12 months, with the percentage thinking that such a downturn has already started doubling to 8 per cent since last month.

David Bowers, a consultant to Merrill Lynch, said: “The period of denial, by some investors, that the credit crunch could have serious repercussions for the real economy may be over. This month’s survey shows an evolution of expectations, from fears of a slowdown to fears of a major recession.”

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