THE FTSE 100 index plunged nearly 5 per cent yesterday as banking and mining stocks fell on worries over the scale of the global downturn.
The blue-chip index shed 202.9 points to 4,005.7 and briefly dipped below the 4,000 mark for the first time
in a month as heavy falls on Wall Street also hit sentiment in London.
Traders in the US had been braced for a tough opening after the biggest monthly fall in inflation since records began provoked fears of deflation, while the struggling US housing market continues to shrink.
CMC Markets dealer David Fineberg said: "The near-term outlook is bleak and there's little to provide any sustainable support just yet."
The mining sector was badly hit by recession fears, with Kazakhmys down 22 per cent, or 42p, to 193p, the FTSE's leading casualty. Vedanta Resources followed close behind, down 76.5p at 438p.
Banks were also suffering after JP Morgan Securities cut share price targets on several UK banks, including Barclays from 210p to 150p.
Barclays was already under pressure after attempts to smooth the passage for its Middle Eastern bail-out plan failed to appease shareholder lobby groups. Shares were down 19.9p at 129.6p during another turbulent session for the sector.
HSBC fell 64.5p to 641.5p, but HBOS gained 1.3p to 64.3p on the day Lloyds TSB shareholders were expected to back the takeover of the ailing bank. Lloyds, however, was also on the back foot, down 12.7p to 118.5p. RBS added 0.6p or 1.4 per cent to 42.3p.
Elsewhere, Marks & Spencer shares fell 6 per cent after it emerged the retailer planned to hold a one-day 20 per cent off sale today. Further pressure on the stock, which declined 11.25p to 200p, came after Seymour Pierce cut its full-year profits forecast on M&S.
Currys owner DSG International was the biggest casualty from Citi's review as shares tumbled 45 per cent, or 5p, to 11p after touching record lows below 10p earlier.
Other fallers in the retail sector included Mothercare, which dropped 21.5p to 268.5p ahead of interim results today. Sports World owner Sports Direct International slid 4.75p to 32.25p and Debenhams fell 4.5p to 23.75p.
The biggest top-flight gain came from credit checking firm Experian – up 7 per cent, or 22.75p, to 329.25p – after it posted first-half results slightly ahead of market expectations.
But elsewhere insulation firm SIG dropped 14 per cent after it warned profits were likely to be towards the bottom end of expectations. SIG, which also said it planned to cut 900 jobs, was down 23p at 158p.
And retailer Woolworths slid another 1.4p to 2.4p after it confirmed it was in talks over the possible sale of its retail arm. Speculation centred on a possible £1 proposal from restructuring firm Hilco.
The full article contains 510 words and appears in The Scotsman newspaper.
