FTSE remains turbulent at closing
The London market suffered a rollercoaster ride today as turbulence in world markets continued to undermine stocks.
After its worst session in more than four years yesterday, the FTSE 100 Index see-sawed between positive and negative territory amid uncertainty over credit markets and US sub-prime mortgage defaults.
At the close, the benchmark index was 36 points lower at 6215.2 – the biggest weekly loss for the index since March – as early selling in US markets encouraged London to give back earlier gains.
The top flight is now back where it started the year, having lost more than 500 points in the space of a month.
The session initially saw the Footsie fall by as much as 58.9 points to 6192.3 before recovering to stand 64 points higher at 6315.2 later in the day.
But the market sank lower on more selling in the US futures market, although another heavy sell-off late in the session to match yesterday’s panic failed to emerge as better than expected consumer confidence figures and GDP data arrested a steeper decline in the markets.
Bank stocks were being closely watched as analysts digested news that the competition watchdog had launched a court case to establish whether their unauthorised overdraft charges are unfair.
Heavyweights from the sector are due to report interim results next week, but in the meantime the stocks endured a difficult session. Lloyds TSB lost 1.5p to 537p and Barclays fell 7p to 682p, while Alliance & Leicester was down 14p at 1017p, even though it posted results at the top end of City forecasts.
HSBC was the exception – ahead 10.5p at 880.5p – while Northern Rock made a late surge to top the Footsie risers board with a near 3% gain of 22.5p to 792p, following results earlier this week.
Meanwhile, the planned merger between closed life insurance specialist Resolution and life and pensions group Friends Provident saw both firms enjoy contrasting fortunes.
Resolution rose to second spot after it emerged last night that Pearl Assurance, a major shareholder, wanted a rethink on the deal as it believed Resolution could find other ways to boost shareholder value. That lifted Resolution by 18p to 649.5p, but the threat to the merger meant Friends Provident fell 1.5p to 180p.
Housebuilders were also in favour as investors backed the sector following yesterday’s sell-off. Persimmon was ahead 21p at 1099p and Barratt Developments up 14.5p to 904.5p as traders said the stocks looked cheap.
But heavily-weighted miners dragged on the index with Anglo American the leading faller – down 114p at 2739p – followed by Vedanta Resources, off 66p to 1618p, and Antofagasta down 25p at 674p in a nervous wider market.
Broadcaster BSkyB, meanwhile, saw shares dip despite reporting full year figures in line with management and market expectations. Shares were down 7p at 668.5p.
The leading Footsie risers were Northern Rock, up 22.5p to 792p, Resolution ahead 18p to 649.5p, Reckitt Benckiser up 72p to 2673p and Rolls-Royce ahead 11.75p to 508p.
The leading Footsie fallers were Anglo American off 114p to 2739p, Vedanta Resources down 66p to 1618p, Antofagasta off 25p to 674p and Experian down 19p to 551p.
