London shares hits new lows
Leading UK shares pushed to new lows midafternoon, weighed down by the steep opening falls on Wall Street, where investors continued to pare their stock holdings despite a robust US consumer confidence survey, dealers said.
By 3.20 pm, the FTSE 100 was down 83.0 at 3,852.3, just 10 points off the intraday low. All the wider indices were also weak.
Volume was very thin, with a meagre 1.333 billion shares changing hands in 113,805 transactions.
On Wall Street, the DJIA was down 96.81 points at 8,441.59, while the Nasdaq composite dropped 27.70 to 1,371.90.
Stocks have been under pressure all day, but showed some sign of life after the release of this afternoon's stronger-than-forecast University of Michigan consumer sentiment index.
The headline index rose to 87.0 in the first reading for December, up from 84.2 in November and well ahead of the 85.0 targeted by analysts, suggesting that US consumers are in a buoyant mood coming into the all-important Christmas season.
But the rebound was short lived, with US investors failing to take any comfort from the data.
It was much the same story with the benign US inflation data released before the opening bell. US producer prices fell 0.4% in November, while the core rate, excluding food and energy prices, dropped 0.3%. This compared with forecasts for a flat headline reading and a 0.1 rise at the core level.
Media issues were a weight on the market all day, as investors sold down their holdings in the sector after Pearson's trading update painted a gloomy picture of the advertising market.
The publisher revealed second-half advertising sales at the FT will be down 11% on an annual basis, and 8% lower compared to the previous six months. As a result, it expects current year earnings at its FT Group to be down 20% from last year.
