City's fears grow as stock market reacts to Japanese disaster

The British Stock Exchange has reacted following the Japanese earthquake and tsunami, with experts claiming the FTSE 100 could drop significantly, causing billions of pounds to be eradicated from shares.

Early trading in Tokyo today (March 14th) saw the Nikkei Index sink by 5.4 per cent, with economists fearing that the country's natural disaster could have a negative impact on the global recovery.

Japan - which is the world's third largest economy - is expected to borrow billions to rebuild the damaged parts of the nation and it is predicted UK gas prices will rise as a result of the stricken nation's demand for liquefied natural gas to plug the gaps in its power supply after two nuclear reactors were hit by the quakes.

Last week, Bloomberg reported that the FTSE 100 fall to a three-month low after the tsunami with the British stock exchange index moving down by 24.59 points to 5,820.7 by 11:50 GMT on March 11th.

Posted by Greg Secker