LEADING London shares slumped into the red yesterday as hefty losses for commodity stocks, retail woes and poor US housing data knocked sentiment.
Lower metal prices and the cheapest crude oil for nearly two months set back mining and petrochemica
l stocks, with retailers also falling after official data showed a record sales drop last month.
The benchmark FTSE 100 index closed down 87.6 points or 1.6 per cent at 5,362.3, erasing Wednesday's gains, with losses accelerated by an early slide on Wall Street amid worse than expected house sales last month.
The benchmark index has fallen 17 per cent this year, against an average yearly gain of more than 10 per cent in the previous five years.
Jimmy Yates, a dealer at CMC Markets, said: "Support is being found – at least for the time being – around the 5,400 level that was subjected to repeated tests during late June before the plunge down towards the 5,000 line last week.
"This does suggest that traders are seeing some value in the market at these levels and assuming factors such as the downward trend in oil prices can be sustained then we may see more bouncing around this level as the summer continues."
The lower oil prices hit prospectors Tullow Oil and Cairn Energy, which were down 40.5p to 725p and 86p to 2,617p, respectively.
BG Group was also on the back foot despite beating City forecasts with interim figures. BG shares fell 6 per cent, or 72p to 1,068p, with BP off 9.25p to 512.5p ahead of its own results next week.
Miners littered the fallers' board on lower copper and lead prices, with Vedanta Resources off 93p at 1,791p.
The leading Footsie faller was British Airways, down 8 per cent or 21.25p at 242p after budget rival EasyJet said full-year profits could be more than 40 per cent below last year's because of a soaring fuel bill. EasyJet lost 37.5p to 332.5p in the FTSE 250.
A 3.9 per cent fall in retail sales volumes during June inflicted damage on retailers.
Marks & Spencer – already under fire after a recent profit warning – lost 10.25p to 259.5p. Fashion chain Next was 48p lighter at 1,016p and Tesco was off 6.8p to 376.5p.
But B&Q owner Kingfisher escaped the damage, rising 7 per cent, or 7.6p to 124.3p after a better than expected performance from the DIY chain amid solid trading.
Rolls-Royce also kept its head above water after vowing that the breadth of its business would help it ride out difficult conditions in the aviation industry. Its shares improved 2.5p to 371.25p.
Shares in London Stock Exchange rose 3 per cent to 849p after Morgan Stanley upgraded the stock to "equal weight" from "underweight" and raised its price target.
In the second tier, Yell advanced 11 per cent or 8 p to 79p after first-quarter trading bucked the City's worst fears.
The full article contains 524 words and appears in The Scotsman newspaper.
