US fears inspire FTSE losses
Fears over the health of the United States economy sent a shiver through the London market today.
The FTSE 100 Index suffered its second consecutive session of heavy losses - plunging 50.7 points to 5377.1 by mid-morning – as the market took its lead from a dire overnight session across the Atlantic.
Jitters were prompted by the continued threat of inflation in the US, while a fall in the cost of a barrel of crude below $63 sent oil stocks tumbling.
Oil has been a key factor in the recent rally by blue-chip stocks, taking the Footsie beyond the 5500 mark for the first time in four years.
BP lost almost 2% of its value, edging 11.5p lower to 623p, while rival Royal Dutch Shell weakened 28p to 1861p and Cairn Energy lost 41p to 1883p.
The mining sector also proved a heavy drag on the market, with BHP Billiton at the top of the Footsie fallers, off 27.5p at 830.5p. It was followed by Antofagasta, losing 39p to 1433p, and Rio Tinto, down 54p to 2160p.
Only a handful of blue-chips managed to break into positive territory, led by airline British Airways. A series of telecoms stocks bucked the gloom with Vodafone adding a penny to 151.75p, Cable & Wireless rising 0.75p to 142.5p and O2 up 0.25p to 165.75p.
Today’s corporate news came largely from the lower tiers, with retailer Ted Baker adding almost 4% as it posted a 12.4% hike in interim profits. Shares cheered 17p to 465p despite the group warning it was not immune to the recent slowdown in the retail market.
Also in the retail sector, Austin Reed cheered a penny to 109p even though sales at its rebranded Country Casuals division continued to disappoint.
