Almost £3.4 billion was wiped off the values of listed companies in the West Midlands in a single week as financial crises in the US and eurozone hit home.

A total of 44 firms listed on the London Stock Exchange saw their gross market capitalisation fall by more than 12 per cent – from £28.17 billion to £24.77 billion – as companies suffered one of the worst weeks on the markets since the height of the banking crisis in October 2008

Among those to be hardest-hit by the fall in stock prices were engineering companies, with the likes of Titan Europe, IMI, Hampson Industries and Aga Rangemaster all seeing shares fall by more than a fifth.

The fall has been driven by panicked investors amid fears over the health of the US economy and concerns over the eurozone debt crisis.

Investment experts said even the safest of sectors – defence and utilities – were hit by the fall, while manufacturers were the biggest losers as they are at the sharp end of business.

And while the markets showed some signs of recovery early this week, share prices remain significantly down week-on-week across the board.

Simon Long, associate investment director at Williams De Broe in Birmingham, said after a rocky week on the markets the stock price of local firms is effectively placed for a recession – even though he does not expect one.

He said: “Yes it is going to have an impact but the impact is more of a psychological one at the moment as the market digests how countries are going to deal with these debts.

“Companies are dealing well in the Midlands, in Europe and worldwide and for that reason the fall in the markets has led to some very good value.”

He added: “The interesting thing is how broad the falls have been. Even the defence sector has seen quite large falls.

“If you look at the traditional safer industries, like farm stocks and utility stocks, they have fallen, although it has been by less than elsewhere.

“The supermarkets’ stock value has also fallen.”

Mr Long said manufacturing companies have seen their share prices hit worse than elsewhere because the sector is more sensitive.

He explained: “Manufacturing as a sector has been hit particularly hard because the sell off has been primarily driven by concerns over the debt of the US and issues in the eurozone and an assumption it is going to lead to a recession.

“The valuations of these stocks almost have that factored in – that there is going to be a recession – but that is not definitely the case.”

He added: “While we have got businesses that are truly global it is going to have an impact but the world isn’t going to stop because parts of the world are over-debted.

“Our manufacturers largely sell to companies that are trading well. Most don’t sell directly to the end user but to intermediaries and companies worldwide are trading well.

Mr Long used engineering giant GKN as an example of a company which has had a significant fall in its share price, in spite of being world-renowned in its field.