FTSE slides as bad news piles up
Turmoil on London’s market showed no signs of ending today after the FTSE 100 Index came within a whisker of setting a new six-year low.
More bleak economic and corporate data, coupled with the prospect of oil prices remaining high, kept the bears in command in the City.
By the close, the Footsie had extended the previous session’s 4% fall to slide another 51.9 points to 3,813.5.
That still represented an improvement on earlier in the afternoon when the blue-chip index stood at 3,781 – just four points from July’s six-year low set in the wake of accounting scandals in the US.
A modest improvement on Wall Street towards the end of trading in London helped the Footsie avoid setting a new record.
Tom Hougaard, chief market strategist at City Index, said there were few positives to be found from another bleak session.
He added: “Volatility has been fierce but all in all it was another negative day for the Footsie, bringing its losses to 200 points for the week so far.”
The performance of the London market closely mirrored that of Wall Street after New York shares were hit by lower-than-expected figures from broker Morgan Stanley and a third-quarter profit warning by Electronic Data Systems.
In addition, disappointing UK data added to the gloom, after a report showing the manufacturing industry remained in the doldrums offset the bright news of better-than-expected retail sales figures.
Hopes had been growing of an industrial recovery but the CBI said that was now stuttering after a survey found order books at a six month low.
Rising oil prices were among the factors blamed by the CBI – a situation unlikely to improve in the near-term after Opec maintained production levels.
The cartel’s decision was made at a meeting in Japan today, when it rejected calls from the West to put more oil on the market and give consumers some relief from high prices.
In London, a swathe of heavyweight companies were under pressure today, with telecoms, oil, financials and defence stocks among those hit.
BAE Systems fell a hefty 13% and GKN slid more than 3% while there was more pain for BT Group investors as shares slipped another 3%.
