Footsie below 5300 mark
The FTSE 100 Index fell below the landmark 5300 barrier today as it chalked up its fifth consecutive session of losses.
Amid continued signs its recent rally is running out of steam, the Footsie dropped 29.6 points to 5292.7 – leaving it around 80 points off last week’s peak.
Economic data contributed to the negative mood, with news that Bank of England Governor Mervyn King voted unsuccessfully to leave interest rates on hold making another cut in rates look unlikely. This in turn made shares seem less attractive.
Paul Webb, trader at deal4free.com, said there was little to suggest the any losses were now coming to an end.
He said that with little left on the corporate calendar this week, traders would be looking to the likes of telecoms group O2 to see if there was any further direction in the market.
A clutch of stocks going ex-dividend – meaning investors no longer have the right to the latest division payment – weighed on the top flight.
Ex-dividend stocks included miners Anglo American and Rio Tinto, off 41p and 53p to 1411p and 1985p respectively, while Norwich Union owner Aviva retreated 15.5p to 621.5p and More Than insurer Royal & Sun Alliance dropped 2.25p to 94.25p.
On a day when stocks struggled to make it into positive territory, O2 was one of the few bright lights. The stock added 4p to 146.75p amid reports German firm Deutsche Telekom is still interested in a possible takeover.
Other telecoms firms mirrored O2’s upbeat performance, with BT adding 4p to 220.75p and Vodafone rising a penny to 151p. Cable & Wireless failed to hold on to gains made earlier in the session, finishing unchanged at 156.25p.
A strong set of half-year figures from Swiss-owned foods group Nestle helped London-listed companies operating in the same sector, including sugar group Tate & Lyle, up 1.5p to 456.75p.
But amongst companies in the news today, Balfour Beatty weakened 7.5p to 332.75p after flagging up the impact of cost pressures on some projects. The firm’s announcement of higher half-year profits was initially welcomed by investors.
In the lower tiers, budget airline easyJet was upbeat after signing a major aircraft maintenance deal, in a move expected to reduce its costs by more than £10 million over the next year. Shares lifted 3.75p to 299p.
Water group East Surrey Holdings was heading in the opposite direction after it emerged multi-millionaire financier Guy Hands was set to pull the plug on a £453 million takeover bid. The firm said it learnt last night that Terra Firma planned to “lapse” the proposed deal, sending shares more than 6% lower, off 32p to 456p.
The highest Footsie risers were O2 up 4p to 146.75p, BT rising 4p to 220.75p, Next up 18p to 1542p and Vodafone rising 1p to 151p.
The heaviest fallers were BHP Billiton off 24p to 813p, Anglo American down 41p to 1411p, Rio Tinto off 53p to 1985p and Aviva down 15.5p to 621.5p.
