London Stocks Plunge On Lehman News

News that US investment Lehman Bros are to file for Chapter 11 bankruptcy sent shock waves around global stock markets Monday, with the FTSE100 down 4221 points, or 4.09%, to 5195.30 at 11.30am London time.

Banks and builders led the way with HBOS, Barclays, Taylor Wimpey, Royal Bank of Scotland, Barratt Developments and the Bradford & Bingley amongst the worst affected. HBOS was down over 100 points, or 36%, to 180.10, it was more than 730 pence at the start of the year.

Meanwhile, troubled US insurer American International Group has asked the Fed for a financial lifeline, according to news reports. In addition Merrill Lynch was sold "on the cheap" to Bank of America as the world's largest retail brokerage company sought refuge from fears it could be the next victim.