Investors hit as £44bn wiped off value of blue-chip shares

BELEAGUERED investors took a fresh pounding yesterday as £44 billion was wiped off the value of blue-chip shares.

Tue, 01 Oct, 2002 - 01:00

Weak trading was compounded by a dismal start on Wall Street, where an update on consumer spending from retail giant Walmart dented sentiment.

Weaker-than-expected economic data also hit home and the Dow Jones Industrial Average and tech-laden Nasdaq sunk heavily into the red.

That piled pressure on the FTSE 100 Index and at one point the top flight tumbled heavily past the 3700 level as it lost 237 points. In the last minutes of trading shares edged back up, but the FTSE 100 still closed 185.4 points adrift at 3721.8.

It has been a turbulent time for shares on both sides of the Atlantic recently and many traders believe the worst is far from over. City Index’s Tom Hougaard said: “October is just around the corner and historically we have always seen plenty of volatility in this month.“The crash and bottom of 1987 happened in October, as was the low of 1998.

I am not suggesting we are going to have a crash but I am suggesting that October is highly likely to see a low.”Insurers were leading the slide in London today as investors continued to worry about solvency issues amid tumbling equities.Shares were also hurt by a fall in French reinsurer Scor’s stock after the group issued a cash call to investors. Royal & Sun Alliance plunged 9.25p to 96.25p, Aviva dropped 19.5p to 357.5p and Friends Provident eased 7p to 105p.

Prudential also fell, off 22.5p to 339.5p, as it confirmed plans to set up a service centre in India in a move that will lead to 850 job cuts in Britain. Banks were also hit, with HBOS down 57p to 587.5p, Abbey National 47.5p weaker at 515p and Lloyds TSB off 35.5p at 469.5p. The heaviest fallers were Amvescap, down 35p at 301p, Granada, down 7.75p at 67.25p, Compass, down 27.5p at 265p and HBOS, down 57p at 587.5p.

Biggest risers: Boots, up 17.5p at 528.5p, SABMiller, up 6.5p at 436p, GUS, up 6p at 542p and Sage, up a penny at 112.5p.