FTSE run skids to halt
The London market’s recent strong run was brought to a dramatic halt today after banking shares slid and the FTSE 100 Index fell 4%.
An alarming update from HBOS on rising levels of bad debts caused banks to fall by as much as 18% by mid-morning, while wider market pressure was caused by the failure of lawmakers to agree a bail-out of the US car industry.
With Asian markets sharply lower in response to the car industry woes, the Footsie stood 180.5 points down at 4208.2. It meant a large slice of this week’s gains were lost.
Five of the first six places on the FTSE 100 fallers board were occupied by banking stocks. Lloyds TSB fell 27.7p to 130.4p and merger partner HBOS slumped 15.5p to 72.1p after the latter said impairment charges soared to £8bn in the first 11 months of the year.
With HBOS forecasting more to come in the next year, Royal Bank of Scotland was off 11.2p at 54.9p and Barclays declined 20.6p to 140.5p, a drop of 13%.
The slump came on the day HBOS shareholders met in Birmingham to vote on the company’s takeover by Lloyds TSB.
A shortened risers board of just five stocks was led by pharmaceuticals company Shire after a gain of 18.5p to 954.5p.
In other corporate news, temporary power specialist Aggreko failed to spark despite forecasting profits at the top end of market expectations. Shares slipped 3% or 10.75p to 402p as analysts noted cautious comments on the company’s outlook in the United States and Europe.
