Investors switch to gold as shares fall

The FTSE 100 Index ended the day down 19.6 points at 5073.8.

The fall came despite shares in mining firms rocketing ahead as gold prices soared above $300 an ounce barrier.

Anglo American rose 3%, up 37p to £12.31, BHP Billiton gained 8p to 398p and Rio Tinto added 43p to £14.38, while Lonmin rose 28p to £10.65.

Faith in shares was hurt by the latest corporate scandal to rock the financial world as Allied Irish Banks revealed this morning that, along with the FBI, it was probing a suspected fraud involving more than £500 million in a US subsidiary.

Among the banking stocks heading south were Royal Bank of Scotland off 35p at £17.57, Barclays dropping 35p at £21.19, Lloyds TSB 10p weaker at 726½p, HBOS off 5p at 769½p and Abbey National easing 29p at £10.32.

Shares in AIB, which has its primary listing in Dublin, were down 2.35 euros at 11.50 euros - a fall of 17%.

Elsewhere, telecom stocks were adding to the downbeat trend as economic worries continued to concern investors.

Vodafone slid 6¾p at 136½p and mmO2 - which yesterday unveiled a swathe of job cuts - fell 2p at 70½p.

Among the smaller stocks, nuts and bolts manufacturer Trifast slumped 30½p at 82p - a 27% fall - after warning flat sales in US and Europe would hit profits and put jobs at risk.

Internet firm InterX said full-year results would be substantially below expectations, and shares slid 73%, off 49½p at 18p.

And sports event management group Sports Resource saw shares slide 21%, off 13p to 47½p, after warning profits would fall below expectations following weaker market conditions.

Office provider Regus unveiled deals worth more than €29m and shares surged 10%, up 3p to 33p.