The London stock market will look to turn a corner next week after a bloodbath which has seen investors run for cover on inflation and interest rate concerns, analysts said. On Friday, London's FTSE 100 index of leading shares ended at 5,655.20 points - down 1.89 percent or a hefty 109.4 points from a week earlier.
However, that marked an increase of 1.66 percent from the previous day's finish - but came hot on the heels of a 2.51-percent plunge on Thursday.
Global equities have mostly tumbled since US Federal Reserve chief Ben Bernanke suggested the current cycle of rate hikes, rather than being close to an end, might have still further to run.
Also on the back of weaker commodity prices, the FTSE had plunged to an intra-day five-year low of 5,510.50 points on May 22 - erasing all of its gains won in 2006. Barclays Stockbrokers analyst Henk Potts said that markets were "spooked" by the prospect of higher US interest rates.
"When Ben Bernanke took over from Alan Greenspan as chairman of the Fed, he became the most powerful man in global markets and what we are seeing now is just how powerful his words can be," said Potts.
"It has clearly made investors nervous. And it is not only happening in the US - interest rates in the eurozone and elsewhere also rising." "There is a lot of uncertainty about at the moment."
London's FTSE is now almost 500 points lower than the five-year peak of 6,132.70 which it hit on April 21, when energy and mining groups were lifted by record commodity prices.
The mining sector was hit particularly hard this week by steep falls in the prices of gold, copper, aluminium, nickel and zinc. The share price of companies such as Anglo American, Xstrata, Rio Tinto and BHP Billiton took a beating, before winning back some ground on Friday.
Next week, meanwhile, sees Royal Bank of Scotland, the second-biggest British bank, publish interim results on Tuesday.
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