Market woe in London
News that the Bank of England may hike interest rates added to market woe caused by higher oil prices and the weak dollar today.
The FTSE 100 Index sank to a 47 point intra-day low after the Bank said a rate increase to 4.75% “might be warranted in due course” if the economy grows in line with projections.
The revelation compounded earlier losses caused by another rise in the price of crude oil and a weakening in the value of the greenback. By mid-morning, the Footsie was floundering 50.8 points off its opening mark at 4982.1.
The day got off to a bad start after the Dow Jones Industrial Average racked up its biggest points fall last night since the middle of 2003, tumbling 174 points to 10611.
Investors reacted negatively to a rise in the price of a barrel of US light crude for delivery in April to nearly $51.5 last night, although it fell about 40 cents today.
Concerns that Asian markets were switching out of US dollar assets also caused dismay.
Back in London, one of the only bright spots came from Cadbury Schweppes after the confectionery group delivered a 1% rise in profits and said it was bullish about its prospects in 2005. Shares rose more than 2%, or 12p, to 523.5p.
Brewer Scottish & Newcastle also lifted spirits by announcing an 11% rise in underlying profits. Shares rose 4.75p to 463.75p.
Banks featured heavily among the losers, with Barclays topping the fallers - down 21p at 584p, Northern Rock off 9p at 796p, Lloyds TSB 8.5p weaker at 497p and HBOS shedding 12p to 840p.
The weakness extended to the FTSE 250 Index, where online bank Egg was 3.5p lower at 111.5p, despite a results pledge from chief executive Paul Gratton to deliver a better year.
