FTSE tumbles to three-month low
The London market tumbled to its lowest level for three months today as banks, insurers and telecoms stocks weighed on trading.
By the close of dealing the FTSE 100 Index was down 61.2 points at 3820.6, after spending the whole day in negative territory.
Banks and insurers were among those on the back foot, while telecoms were also sliding lower in a depressing end to the week.
A tumble on Wall Street also hit the mood. US exchanges slipped on increased concern about war with Iraq and following sluggish outlooks from Microsoft and IBM.
Martin Dobson, head trader at NatWest Stockbrokers, said: “It’s a disappointing day and it hasn’t been a pleasant week all-round.”
Concerns that consumers have taken on too much debt and could now default on payments hurt the banking sector.
Among the financial stocks, Abbey National fell more than 4%, down 22p at 478p while Royal Bank of Scotland fell 24p to 1418p and HSBC dropped 10p to 690p.
Insurers on the back foot included Friends Provident, off 3.25p at 104.25p, Legal & General down 3p to 86p and Prudential, which eased 14.5p to 396p.
Elsewhere, chemists came under pressure after the Office of Fair Trading recommended a relaxation of rules governing the pharmacy industry.
Boots initially dropped more than 4% before fighting back to stand down 6p at 541p but Alliance Unichem fell 11p to 445p.
Telecoms were also weaker amid fears of falling revenues – a report today said the cost of making mobile phone calls across rival networks was set to fall by nearly half over the next three years.
MmO2 was off 2.5p at 48p, Vodafone was 4.5p weaker at 119p and BT Group slipped 7.25p to 192.75p.
And not even the emergence of a fourth bidder – US buyout group Kohlberg Kravis Roberts – for Safeway could add any spark to proceedings.
Safeway dropped 2p below yesterday’s eight-month high, down to 305p, as analysts predicted any successful bid may still be months away.
But Morrisons was up 4.25p to 182.25p, while rival bidder Sainsbury’s rose 7.5p to 247p. Tesco nudged up 0.5p at 183.5p.
B&Q-to-Comet group Kingfisher also bucked the trend, rising a penny to 199p after taking a major step forward in its restructuring today by agreeing to offload its German electricals chain ProMarkt.
The group is handing the loss-making operation back to its former owners for just one euro (66p) and the deal was widely welcomed in the City, where analysts believed Kingfisher may have had to pay more to break free from the chain.
A number of other retailers also managed to edge ahead, as the sector recovered some of its losses. Marks & Spencer rose 2.5p to 317p while GUS was up 3p at 528p.
The biggest Footsie risers were Sainsbury up 7.5p at 247p, Morrisons up 4.25p at 182.25p, Smith & Nephew up 4p at 371p and Diageo up 6p at 652.5p.
Fallers were Sage down 9.5p at 130.75p, Invensys down 3.25p at 56p, mmO2 down 2.5p at 48p and British Airways down 6.75p at 130.5p.
