FTSE slips below 5000 mark
The London market ended today below the 5000 barrier after investors took fright at hints about higher interest rates.
The FTSE 100 Index failed to break into the black throughout the session, closing 44.4 points down at 4988.5.
The index recovered slightly from an intraday 62-point low after a marginal increase in US inflation helped calm rate rise fears in New York.
Prices paid by US consumers rose 0.1% in January, allaying concerns a larger increase could have led to a more aggressive rate policy by the Federal Reserve.
Relieved investors on Wall Street pushed up the Dow Jones Industrial Average 61 points shortly after the end of trading in London. However, the London market stayed firmly in the red after news that the Bank of England may increase interest rates.
The Bank said a rate increase to 4.75% “might be warranted in due course” if the economy grows in line with projections.
That news compounded early losses caused by another rise in the price of US crude oil and a weakening in the value of the greenback.
Back in London, Cairn Energy topped the Footsie risers on media speculation the firm eventually may become a bid target. Shares in the group lifted 22p to 1211p.
Cadbury Schweppes stood just 0.25p ahead at 511.75p after delivering a 1% rise in profits and reporting a bullish outlook.
After making early gains, brewer Scottish & Newcastle slipped 1% or 5p to 454p despite announcing an 11% rise in underlying profits.
The news helped S&N’s rivals in the drinks market, with SABMiller frothing up 4p to 851.5p and Allied Domecq lifting 0.5p to 527.5p. However, Diageo fell 2.5p to 756.5p.
Banks featured heavily among the losers, with Barclays topping the fallers, down 22p at 583p, Lloyds TSB 10.75p weaker at 494.75p, Alliance & Leicester receding 20p to 904p and HBOS shedding 1% or 8.5p to 843.5p.
The day’s biggest risers were Cairn Energy up 22p at 1211p, Rolls-Royce adding 2.5p to 261p, British Airways gaining 2.5p to 270p and Morrisons advancing 1.75p to 215.5p.
The biggest losers were Barclays off 22p at 583p, Standard Chartered retreating 26.5p to 971.5p, Royal & Sun Alliance shedding 2.25p to 84.5p and Anglo American easing 32p to 1305p.
