FTSE slides with U.S. as recession fears die hard

By Rebekah Curtis

LONDON (Reuters) - Top shares slid 2.3 percent on Wednesday, as market turbulence swept through Europe and Wall Street dipped its toes into bear market territory amid persistent fears of a U.S. recession.

A surprise U.S. rate cut of 75 basis points to 3.5 percent the day before offered initial respite, prompting Asia to rally and Europe to open higher.

But the relief was short-lived as markets sensed the Fed's move was a palliative rather than a cure for raging recession anxiety.

"We're going to live in very volatile conditions for some months," said David Buik of Cantor Index.

"What the Fed has done has needed doing... but for there to be any effect it's going to take six months."

The FTSE 100 closed down 130.8 points at 5,609.3 as the market buzzed with talk of further subprime write-downs and surprise interest rate cuts.

"It's whipping around, this market, it's all over the place," said Roger Cursley, UK strategist at Investec.

The FTSE slumped 5.5 percent on Monday, its largest daily loss since September 11, 2001, and has lost about 13 percent since the start of the year as recession fears have grown.