BLUE-CHIP shares tumbled for the second session in a row yesterday amid continued fears that the US will taper its economy-boosting quantitative easing drive.

The FTSE 100 Index was down 1.3 per cent, or 83.2 points, at 6336.1, following Wednesday’s 2.1 per cent plunge, its steepest percentage fall for more than a year.

The top flight is now a full 500 points off its position two weeks ago when it threatened to reach new highs. Some experts fear the correction has further to run, with uncertainty remaining over the US Federal Reserve’s monetary plans.

However Nick Dale- Lace, senior sales trader at CMC Markets UK, suggested the fall did not have much more to go, given that it was not grounded in any concrete developments about the policy of the US central bank.

In New York, the Dow Jones Industrial Average was flat at the time of close in London while European markets saw similar plunges to those seen on the FTSE.

Meanwhile, the pound climbed two cents, or 1.2 per cent, against a weak US dollar to 1.56, while it was flat against the euro.

There was further cheer for the UK economy – to add to encouraging survey data earlier in the week – as the latest Halifax house price report showed the strongest annual increase for more than two years in May, with property values rising by 2.6 per cent yearon- year to £166,898 on average.

Chemicals company Johnson Matthey was the session’s biggest blue chip gainer, up six per cent or 164p to 2750p, after an underlying fall in pre-tax profits was less than feared.

But Barclays was in the red, down four per cent or 13p to 303.3p, after Sumitomo Mitsui Banking Corp sold 50 per cent of its shareholding through a placing by Nomura.