£28bn wiped as FTSE falls again
Investors had another traumatic session on the London stock market today, as shares were hit by a wave of selling.
The equivalent of £29bn was wiped off the FTSE 100 Index, as it erased recent gains to close at just 4420.1- down 122.8 points on the day.
The market is now back below its post-September 11 lows and is nudging close to last week’s five-year lows when it slid to 4392.6.
Today’s fall came on the back of another slump on Wall Street, which slid as corporate and accounting jitters continued.
The slide came on top of heavy losses on Tuesday after the Dow Jones was hit by the disappointing report on hormone replacement therapy (HRT) drug, which hurt pharmaceutical stocks.
Markets in Europe slid heavily in today’s trading, with heavyweight drug stocks taking a battering in the wake of the HRT doubts.
Justin Urquhart Stewart at Seven Investment Management said: ‘‘Heathcare has been the trigger but we are still in a state of a buyers’ strike. Any ordinary news is magnified. Confidence is easily lost and hard won and we could be in this cycle for the next year.’’
Tom Hougaard, trader at financial bookies City Index, said: ‘‘It is a pure sell-off, stocks just cannot hold gains. We are in a very, very steep downtrend.
‘‘It just gets worse and worse and there’s nothing to stop it. The perception has changed. It used to be that the glass is half full, now it is has now turned to being the glass is half empty.
‘‘If you had invested your life savings in the stock market, there comes a point where you can’t take any more pain.’’
Among the steep fallers today were GlaxoSmithKline, sliding 70p to £12.70 and AstraZeneca, down 181p at £24.65, although both companies said they were not involved in HRT.
Hilary Cook, director of investment strategy at Barclays Private Clients said: ‘‘The whole US pharmaceutical market was hit by the announcement, so the whole UK sector was hit as well. AstraZeneca and Glaxo are very vulnerable to US sentiment.’’
Oil giant Shell weighed heavily on the market, down 5%, following a shake-up of closely-followed US index the S&P 500 last night, which will see Royal Dutch leave the US index. Unilever, which was also bumped out, slid 3%.
Banks and fund managers were also hard hit by the market woes.
Risers were few and far between and only five stocks which managed to post gains on the day.
One of these was Abbey National, surging 4% on renewed speculation that National Australia Bank is contemplating a takeover.
Marks & Spencer was another after a first-quarter trading update showed a strong performance in clothing although some felt food sales were slightly disappointing.
