Overseas markets drag FTSE into red
Trading screens were a sea of red today after negative factors from overseas acted as a drag on sentiment in the London market.
The FTSE 100 index fell by more than 100 points at one stage before reaching mid-morning 86.2 points lower at 6348.5, a drop of 1.3%.
Analysts blamed the threat of South African mining taxes and negative comments on the US economy from former Federal Reserve chairman Alan Greenspan for the weakness. A tumble in Chinese markets and escalating problems in Iran also contributed.
Mining stocks were hit hardest, with Xstrata down 5% or 141p at 2515p and Vedanta Resources 56p lower at 1285p. The sector accounted for the top six fallers.
Reuters was one of three top-flight stocks in positive territory after Credit Suisse upgraded the news and information provider.
The stock rose 1% or 6p to 432p, ahead of Cairn Energy after the India-based oil explorer announced details of a £481m (€715.2m) dividend payment. Its shares were up 1p at 1631p.
Takeover speculation pushed Argos owner Home Retail Group to the top of a shortened risers board, up 10.5p at 439.25p. Dealers at TradIndex said market rumours were focused on possible interest from Apax Partners.
Aerospace parts business GKN dominated trading in the FTSE 250 index after it reported strong sales and exceeded expectations with a doubling of underlying profits. Shares jumped 9% or 30p at 350.75p.
Avis Europe went into reverse after the boss of the car-hire company warned that trading conditions were likely to remain tough in the near term. The stock slumped 15% or 12.75p to 72.75p.
Meanwhile, the market weakness affected the start of trading for Sports Direct International, which owns Sports World. The stock started at 300p, earning £929m (€1.4m) for founder Mike Ashley, but later retreated to 294p.
