FTSE slides towards 4000 mark
London’s blue-chip banks fell back today as profit taking and continued fears about the economy pushed the FTSE 100 Index lower.
Drugs giant GlaxoSmithKline also weighed on the market as third quarter numbers came in at the bottom end of expectations.
And by lunchtime the Footsie was falling back towards the 4000 barrier, dropping 71.6 points at 4047.3 after a surge early on.
Analysts put the bulk of the drop down to profit taking after the market’s recent rally and signs of a poor start in the US later today.
Others added investors needed further evidence of an economic recovery before stepping back into the City.
Minutes showing a split-vote at the Bank of England’s interest rate setting meeting this month heightened fears about the UK’s health.
Banks accounted for a large part of the fall after their recent strong run with Barclays down 4%, or 20.75p at 446.25p.
Lloyds TSB dropped 24.5p to 564p, Royal Bank of Scotland fell 73p to £14.92, HSBC fell 1p to 719.5p and HBOS dropped 20p to 710p.
Other financial stocks were also lower as concerns about profitability and bad debts continued to swirl.
Insurer Aviva was off 29p at 465p, while Prudential fell 23.5p to 435p despite strong third quarter results from internet bank Egg.
The FTSE 250 stock, majority-owned by the Pru, rose 2p to 129p, after announcing cut losses and saying it had a 5% share of the credit card market in the UK.
Back in the Footsie, property group Canary Wharf jumped 4% after bringing forward plans for a bumper £350 million shareholder payout.
The group climbed 12.25p to 374.25p after announcing it would be returning the cash through a special dividend.
But drugs giant Glaxo, under pressure recently from generic producers, fell 4% as its third quarter results disappointed the market.
The group lost its earlier gains to fall 55p to £12.76 despite announcing plans to extend its programme of share buy-backs.
And supermarket chain Safeway was continuing to struggle after yesterday’s second quarter update, slipping 4%, or 8p to 206p.
The group insisted it was on course to hit half-year targets but showed like-for-likes sales growth had slowed to 1.1%.
Among smaller stocks discount clothing retailer Matalan fell 3.5p to 191.5p despite an early surge after strong half-year figures.
The group posted a 9% jump in profits to £53.6 million but fears about the clothing market hit the stock later.
And transport giant Stagecoach plunged 38% after warning its US operations were continuing to suffer from the country’s weak economic climate.
Shares dived 9.5p to 15p as the group warned profits at Coach USA would now be at least £20 million below target in the year to April 2003.
