Shares retreat as slide on trading dents confidence

THE London market ended lower for the fifth session in a row yesterday, after a slide on Wall Street dented confidence.

By the close of trading the FTSE 100 Index was down 16.2 points at 4032.4, and erasing all its earlier gains when it surged above the 4100 level.

The market was boosted earlier yesterday by rises in banking and oil stocks, while the European Central Bank’s decision to shave a half percentage point from interest rates in the eurozone also lifted traders’ spirits in the City.

Experts said the ECB’s cut was likely to boost confidence as it should help generate a higher demand in Europe for UK exports.

But a poor start to trading on Wall Street hurt the mood and shares retreated. US stocks slid for the fifth day in a row on the back of disappointing retail sales and the increased threat of bankruptcy at United Airline parent UAL, after it yesterday lost its request for government loan backing.

Among London stocks, Friends Provident was the heaviest faller, down 7%, or 9.25p at 131p after the group completed a bond issue to raise £245 million. Dealers said the move saw traders sell shares to move into the bonds.

Other insurers on the back foot were Prudential, down 25.5p at 482.5p, and Legal & General, 2.75p lower at 106.75p.

Early in the session banks had put back some of their losses, following Barclays’ gloomy trading statement and Lloyds TSB’s warning of bad debt provisions.