Looming GM bankruptcy overshadows FTSE
London’s blue-chips were mired in the red today as the looming bankruptcy of car giant General Motors dealt a blow to market sentiment.
GM’s failure to agree a deal with its bondholders, announced yesterday, pushed the Dow Jones Industrial Average 2% lower overnight and undermined hopes of an imminent recovery.
In London the FTSE 100 Index was 40.1 points down at 4376.2 by mid-morning as investors mulled the news with few top-flight stocks in positive territory.
A mixture of stocks were dragged lower by the downbeat mood, including British Land after a fall of 13.25p to 391p despite Goldman Sachs upping its target price.
Financial services group Man was the leading faller, off 8% or 20p to 230p after it announced a 64% fall in full-year profits and said funds under management had declined since its last update in March. This raised fears about its 2010 performance, even though today’s results were ahead of hopes.
Other financial sector stocks under pressure included Barclays, off 6.25p at 283.75p, HSBC down 14.5p to 536.5p and insurer Prudential, 11.5p lighter at 426.75p.
Among the few risers were more defensive stocks, including British Gas parent Centrica, 0.5p better at 249.5p and drugs firm Shire, which added 4p to 860.5p.
Building supplies firm Wolseley was another heavy faller in the FTSE 250 after chief executive Chip Hornsby reported a near 90% fall in profits and said trading conditions were likely to remain tough for some time. Shares fell 14% or 171p to 1057p.
Soft drinks firm Britvic meanwhile added 0.75p to 275.75p after it emerged that private equity firm Permira had sold its 13% share in the business.
But elsewhere shares in sportswear firm JJB Sports were down 4% or 1.5p to 36.5p after Sports World entrepreneur Mike Ashley offloaded his minority stake.
