FTSE falls amid mixed news
The FTSE 100 Index ended another torrid week on the back foot today after financial stocks struggled in the face of more grim news.
Investors were also edgy ahead of jobless numbers in the United States but fears London could be sent into a spin were not realised as the data proved to be mixed.
By the close, the Footsie was down 66.5 points at 3813.8 to ensure a week which started with a £44 billion slump eventually finished lower.
The poor sentiment towards banking stocks began with a profits warning in the US last night from the Bank of New York.
The sector was further shaken by a broker note that forecast mortgage bank Abbey National may have to make a major write down and slash its dividend.
Abbey made no comment but shares were under pressure throughout the session, eventually closing 6% lower – down 34.5p at 505.5p.
Other banks on the retreat included Barclays down 19.5p at 388p, Lloyds TSB off 12.5p at 492.5p and Royal Bank of Scotland 60p lower at £12.49.
Insurers were also suffering with Royal & Sun Alliance top of the Footsie falls board as nervousness over prospects for a possible rights issue grew.
Shares fell 9p to 94.5p while Prudential was off 23.5p at 340.5p and Legal & General eased 2.25p to 91.25p on another troubled day for the sector.
The lack of major corporate news added to the nervy mood in London while drug companies proved a drag following a warning from US firm Schering-Plough.
GlaxoSmithKline fell 33p to £13.04 while AstraZeneca slid 3%, or 63p to £20.57.
Engineering group Invensys proved to be another struggler with a decline of 4.5p to 55.5p after a broker downgraded its target price for the stock.
Other leading companies under pressure included Vodafone down 3p at 90p, rival mmO2 off 0.75p at 45.75p and BT Group down 8.25p at 162.75p.
Retail stocks were generally brighter following widespread falls yesterday, when the sector was hit by disappointing sales figures from fashion chain Next.
Marks & Spencer, which is due to issue a trading update on Monday, managed to put back some of its losses, rising 14.5p to 307.5p while Argos-owner GUS was up 12p at 524p and Boots added 8p to 538.5p.
Next, which alarmed the market by reporting a slowdown in sales because of the unseasonal weather, staged a late rally to close 5.5p ahead at 790p.
Among smaller stocks, health club group Fitness First remained on the slide following yesterday’s profits warning. Shares, which slumped more than a third yesterday fell another 27% today, down 37p to 98p, after the warning that full-year profits would be 20% below market hopes.
Rival LA Fitness also slid, down 5%, or 9.5p to 165.5p, despite putting out a reassuring statement saying its full-year figures would be in line.
The biggest Footsie risers were Pearson up 31.5p at 554p, Marks & Spencer ahead 14.5p at 307.5p, Granada up 3.5p at 75.5p and Corus Group ahead 1p at 37.25p.
The biggest fallers were Royal & Sun Alliance down 9p at 94.5p, Invensys off 4.5p at 55.5p, Reuters down 16p at 210p and Prudential off 23.5p at 340.5p.
