FTSE traders fear US economic health
A fresh sell-off took the FTSE 100 Index below 6,000 today as markets reacted to fears over the health of the US economy.
The London market followed yesterday’s 3% tumble by slipping a further 1%, with the benchmark index down 69.8 points at 5955.8 by mid-morning.
Investors’ nerves were frayed by heavy losses in Asian markets overnight following a 277-point fall for Wall Street’s Dow Jones Industrial Average yesterday.
The Footsie has not traded below the psychological 6000 level since the height of the panic in global markets last August.
Falling retail sales in the US and the latest credit crunch woes of the world’s biggest bank, Citigroup, were behind the latest wave of negative sentiment undermining markets.
Heavily-weighted mining stocks played a big part in dragging the Footsie lower as traders reacted to lower base metal prices and fretted over a possible faltering in demand for commodities in a slowing global economy.
Vedanta Resources was the worst performer in the sector, down 108p at 1882p, closely followed by Antofagasta, off 27.5p at 605p and Kazakhmys, which slipped 54p to 1213p.
Citigroup’s woes meanwhile led to further banking losses amid fears of subprime write-downs. HSBC was the sector’s worst-hit stock, off almost 4% or 28p to 744.5p, after suffering overnight in Hong Kong’s Hang Seng exchange. Halifax Bank of Scotland was another loser, off 20.5p to 619.5p.
Broker downgrades added to the gloom with the London Stock Exchange the leading Footsie faller. The stock was off almost 9%, or 150p, to 1561p after Sanford Bernstein predicted slowing revenue growth.
Telecoms firm Cable & Wireless – also marked down today by Morgan Stanley - fell 11.2p to 159.2p
Among the risers, however, drugs giant AstraZeneca, moved 63p ahead to 2290p - or almost 3% – after Goldman Sachs said it saw a buying opportunity in the company’s recent share price weakness.
