BRITAIN'S leading share index shed almost 30 points yesterday as Tuesday's rally came crashing to a halt amid profit-taking in the banking sector.
Meanwhile, Xstrata tumbled 5.2 per cent to 3,522p after the Anglo-Swiss mining giant and Vale said l
ate on Tuesday that they had failed to agree on terms of what would have been one of the world's biggest takeovers, valued by some analysts at $90 billion (£45bn).
Other miners traded higher as metal prices held firm. Kazakhmys gained 4.2 per cent after saying it welcomed a recent statement by the Kazakhstan government that it wished to take a minority interest of up to 15 per cent in the miner.
Banks led the decline in the top-flight index, robbing the FTSE-100 of 18 points. Royal Bank of Scotland and Barclays both fell 3.1 per cent, to 340.5p and 444.75p respectively, while HSBC eased 1.8 per cent to 812.5p.
HBOS dipped 3p to 541.5p following the previous session's near-15 per cent leap.
Also weighing on the sector, Germany's Deutsche Bank said disruption to revenues and writedowns on assets stemming from global credit turmoil could put its profit goal for this year at risk.
Roger Cursley, a strategist at Investec, said: "It feels like we could bump along the bottom, give or take 200 points each way, for weeks if not months.
"People are very bruised and very shaken up, and trying to find some positive arguments but just a bit tired of ... coming in looking at the markets. It's become a very long drawn-out business."
The Footsie ended down 28.7 points, or 0.5 per cent, at 5,660.4. The UK benchmark index has fallen more than 12 per cent so far this year on fears of a US recession stemming from a meltdown in risky subprime mortgages, and is on track for its worst quarter since Q3 of 2002.
Sainsbury's rung up some decent gains, jumping 21.5p to 358p after a Q4 like-for-like sales hike of 4.1 per cent bettered City hopes for 3.7 per cent.
The update countered fears that a resurgent Morrisons had eaten into the grocer's market share and helped the stock recover some of its recent weakness.
In the FTSE-250 index, Debenhams tumbled 17 per cent after Merrill Lynch private equity reportedly sold 47.3 million shares at 60p each, compared with Tuesday night's closing price of 71.5p. Shares were down 12.25p last night at 59.25p.
Housebuilders were also under pressure after Bellway said reservations dipped 9 per cent between 1 August 2007 and the middle of this month. Bellway's shares were off 21p at 789p, while Bovis Homes dipped 32p to 565.5p, Redrow eased 14.75p to 289p and blue-chip rival Persimmon fell 32.5p to 737.5p.
Footsie heavyweight Vodafone offered investors some respite, up 1.1 per cent after it said it expected to start receiving dividends from its US joint venture Verizon Wireless next year.
The full article contains 529 words and appears in The Scotsman newspaper.
