FTSE down 4.1%
The FTSE 100 Index slid 4.1% today during another session of turmoil for world markets.
London’s benchmark index closed at its lowest level since September 2006 after the continuing credit fears saw the Footsie fall 250.4 points to 5858.9 at the close.
The fall – the biggest one-day percentage drop since March 2003 – was heavier than last Friday’s collapse and wiped nearly £60 billion from London’s leading companies.
The latest alarm for world markets came after Merrill Lynch warned that Countrywide, America’s biggest home loan lender, was at risk as investors shunned mortgage securities during the current credit crisis.
Countrywide said it had borrowed $11.5bn (€8.5bn) from a consortium of banks to fund its operations in the crunch, sending the Dow Jones Industrial Average nearly 200 points lower at the time of London’s close.
Trading screens in London were a sea of red as every single member of the Footsie succumbed to the losses.
Banks and miners bore the brunt of the sell-off, with Antofagasta topping the fallers’ board after a drop in metal prices and amid general concern about slower economic conditions. The stock was down nearly 11%, or 75p, to 608p, followed by Lonmin off 290p to 2792p and Anglo American down 255p at 2470p.
The FTSE 350 banking sector was down by 3% while general financial firms were 6% lower overall. Heavyweight casualties included Man Group, which fell 40.5p to 446.75p, and Invesco after a drop of 38.5p to 551.5p.
Northern Rock suffered further losses as investors worried that the firm may issue a second profits warning in the space of two months. Shares fell another 4%, or 28.5p to 659p, amid concerns that the bank is too reliant on wholesale credit markets for the funding of its mortgage lending.
The 4% decline was mirrored elsewhere in the sector, with Alliance & Leicester down 40p at 1001p and Barclays off 28p at 605p. Asian-facing bank Standard Chartered slipped more than 7%, or 118p to 1444p.
Cadbury Schweppes lost 3%, down 17p to 534.5p, after reports said the confectionery giant may pull the sale of its American drinks arm.
The turbulence distorted the market’s reaction to results from nuclear power firm British Energy, which reported a fall in first quarter underlying earnings. Shares were off 36.25p at 417.75p, a drop of nearly 8%.
A solid set of quarterly figures from real estate investment trust British Land helped stem the stock’s losses in a falling wider market.
Its shares clung on to positive territory throughout much of a stormy session but the stock succumbed at the finish to close 8p lower at 1206p after it said strong demand for London office space boosted rental growth despite a slowing market. Land Securities was down 23p at 1713p – also supported by the news.
The leading Footsie fallers were Antofagasta, down 75p to 608p, Lonmin off 290p to 2792p, Anglo American down 255p to 2470p and Kazakhmys, which fell 99p to 1071p.
There were no Footsie risers.
