FTSE ends session with sharp falls

Thursday, 2nd July 2009

END-OF-DAY REPORT: Headline shares ended the day with sharp falls, the downturn accelerating after heavy falls in early trade on Wall Street. Losses were broad-based, with Diageo leading the rare winners in the wake of its job cuts announcement.

At the close of play, the FTSE100 was down 106.44 points at 4,234.27 with the FTSE250 off 132.7 points at 7,374.01 and the FTSE Smallcaps 8.66 points lower at 2,243.29.

NEW YORK

US stocks fell heavily as weaker-than-expected June payroll data created more concerns about the economy ahead of the extended bank holiday weekend.

Approaching the close in London, the Dow Jones Industrial Average was down 170.34 points at 8,334, the S&P500 was off 20.35 points at 902.98 and the Nasdaq Composite fell 43.73 points to 1,802.

LONDON MARKETS

PMI construction data showed the rate of manufacturing decline slowing, although continuing to contract, setting the dismal tone for the day.

An unexpected move by Sweden to cut its key interest rate to a record low of 0.25%, created activity in the currency markets this morning, coming as the ECB held rates at 1% and reportedly said it expected interest rates in Euroland to remain stable through the year.

Mining shares eased lower. Rio Tinto was the worst of them, off 123p at 2,035p despite news of a 96.97% take-up of its record rights issue in London.

Lonmin was down 61p at 1,157p, while Anglo American dropped 106.5p at 1,726p, BHP billiton lost 67p at 1,358p and Xstrata fell 28.8p at 664.4p.

Oil majors eased as the price of crude tumbled to $67.70 a barrel on Nymex, with BP off 9.05p at 480.95p, BG Group 32p lower at 1,029p and Shell down 47p at 1,509p.

Among the banks, red ink was the order of the day, in line with the general market. Standard Chartered gave up 25p at 1,155p, Barclays ended down 1.25p at 289p and Royal Bank of Scotland was the worst sector performer as the backlash over CEO Hester's remuneration package rumbled on, the shares down 1.51p at 37.9p.

Insurers fared a little better, with Friends Provident, up 0.12p at 68.09p, and Admiral, up 1p at 877.5p, the only stocks making any progress. Prudential slid 12.75p to 400.75p and Aviva was off 13p at 335.75p.

Drinks giant Diageo was the best blue chip performer of the session, up 8p at 905p, with Petrofac the only other FTSE100 constituent in positive teeritory, up 3.5p at 683p.

Carphone Warehouse and Vodafone failed to take advantage of news they have mended their three year rift over monthly contract sales. CPW shares fell 4p at 155.75p and Vodafone slipped 4p to 115.5p.

British Airways remained weak as its high profile pay dispute continued to make headlines, down a further 5p at 119p, giving no-frills peer easyJet a lift on hopes it might gain from the fallout, 0.25p better at 268p.

The hangover from yesterday's news it was losing its East Coast rail franchise pushed National Express lower still, off a further 10p at 274p, with doubts being raised about whether it will manage to retain its remaining franchises.

The troubles spilled over to other operators, with FirstGroup forced 8.75p lower at 345.25p and Go-Ahead down 16p at 1,190p.

Oil and gas pipeline supplier Wellstream Holdings dipped 6.5p at 517.5p, despite reporting it secured 90% of 2009's anticipated revenues in the first half.

Brewer and pub operator Greene King was a bright spark in the gloom, up 12.25p at 422.25p, after reporting that pretax profit slipped 15% to £118.5m in the year ended 3rd May, ahead of target. The company said its Belhaven brewery achieved a milestone profit of over £30m, with growth of 11.9% in the year.

Photo-Me International was another bucking the dismal trend of the day, ahead 1.75p at 18.25p, after revealing it had swung into pre-tax profit on continuing operations of £1.6m in the year to April.

Computer games specialist Game Group said today like for like sales for the first 21 weeks to 27th June 2009 were down by 15.4%. The shares sagged 22p to 142p.

Story provided by Business Financial Newswire