The FTSE 100 today fell perilously close to bear market territory after it threatened to dive by 20 per cent from its October peak as oil soared to a new record of nearly $146 a barrel.

By 8.30am, the blue chip index was down 54.3 points at 5,372, before regaining some ground to fall by just 22.4 points within the hour.

However, if the FTSE 100 falls back further, it is in danger of declining by more than 20 per cent from October's high. A decline of 20 per cent is the generally accepted definition of a bear market.

The lowest point so far this year was in March, when the FTSE 100 closed at 5,414 points as Bear Stearns, the US investment bank, was close to collapse. ... Read full article