Blogs and advice from Industry leading Specialists
Valuable Opinions, Comments & Gossip
Financial related News & Articles relating to Spain
Latest News, Stories
& Hot Topics
Various Tools & Widgets to help with your financial needs
Tools & Widgets to
help with finances
Polls, Surveys and Opinions featured throughout Tumbit
Featured Polls, Surveys & Stats
Discussions, Advice & Topical Chat
Discussions, Advice & Topical Chat

FTSE sheds 2.3 percent

Source: Reuters - Thu 29th Oct 2009

The top shares fell 2.3 percent to hit a three-week closing low on Wednesday, dragged down by falls in energy stocks after BG Group posted a sharp drop in net profit, while miners tracked weaker metals.

The market also came under pressure on data showing new U.S. homes sales unexpectedly tumbled in September, their first drop in six months, underscoring the hazards to an economic recovery that businesses appeared to be banking on.

The FTSE 100 closed down 120.55 points at 5,080.42, on the 80th anniversary of the "Black Monday" stock market crash of 1929, and posted its biggest one-day percentage fall since July 2.

The FTSE has rallied 47 percent since hitting a floor in March. After three months of consecutive gains from July to September, the index is on course to post its first monthly decline in four months.

"When you see the quality of economic data coming out which at best is average and you have a 50 percent rally in the last seven months, something has to give. We are just having a reality check here" said David Buik, senior partner at BGC Partners.

Miners were the biggest drag, underpinned by lower metals prices on worries about rising inventories and poor demand. Xstrata, Lonmin, Rio Tinto and BHP Billiton shed 6.1 to 9.4 percent.

Vedanta Resources lost 4.2 percent, pressured by a broker downgrade by Barclays Capital to "equal weight" from "overweight." Kazakhmyz, which reports third-quarter output numbers on Thursday, was 9.1 percent lower.

BG Group fell 3.3 percent, after posting a 44 percent drop in third-quarter net profit to 484 million pounds as gas and oil prices plummeted, though its underlying profits beat forecasts. 

BP shed 1.7 percent a day after posting forecast-beating results. Citigroup cut its rating for the oil major to "hold" from "buy" on its judgement that the firm's operational recovery is peaking.

Royal Dutch Shell and Cairn Energy declined 1.2 to 5.2 percent ahead of their third-quarter results on Thursday. Weaker crude prices also weighed on the sector.


The banking sector extended its decline, with the break-up of Dutch financial services group ING continuing to weigh heavily on its peers. Investors are unsettled by mounting fears over the disposals government-backed banks will have to make in order to satisfy the European Commission.

Royal Bank of Scotland, Lloyds Banking Group, Barclays, Standard Chartered and HSBC fell 1.3 to 6.1 percent.

In the wake of ING's split, state-owned lender Northern Rock got clearance from European regulators to be broken up on Wednesday, paving the way for a sale.

"Investors are also apprehensive ahead of important U.S. GDP numbers tomorrow which are expected to show the world's biggest economy is coming out of a technical recession" said Angus Campbell, head of sales at Capital Spreads.

Life insurers were also weak, with Prudential, Legal & General, Old Mutual and Standard Life down 2.7 to 9.8 percent.

Prudential posted a better-than-expected 9 percent drop in third-quarter sales as its Asian region and U.S. businesses offset weakness at home. 

GlaxoSmithKline dropped 0.4 percent. The drugmaker posted broadly in-line sales of 6.76 billion pounds and expects a big H1N1 vaccine boost in the fourth quarter.

AstraZeneca lost 1.5 percent ahead of its third-quarter numbers on Thursday, while Shire, which is due to report quarterly figures on Friday, slipped 0.9 percent.

On the upside, telecoms stocks were higher with mobile heavyweight Vodafone up 0.3 percent and Inmarsat adding 0.6 percent as Barclays Capital initiated coverage on the European telecommunications sector with a positive view.

Defensive utility food retailers also gained ground, with Tesco and WM Morrison up 1.9 and 1.3 percent. Tesco also benefitted from optimism about its expansion into financial services.

Comment on this Story

Be the first to comment on this Story !!

Recommended Items