FTSE closes at five-year low

The London market slumped to its lowest close for more than five years today as another plunge on Wall Street send shudders through investors.

By the close of trading, the FTSE 100 Index of leading shares plunged through post September 11 lows and was down 154.2 points at just 4392.6.

The lowest it reached in the aftermath of September 11 was 4433.7 on 21 September.

Today’s slide brings the Footsie to its lowest point since April 28 1997.

A slump on Wall Street hit shares further, after the Dow Jones Industrial Average and Nasdaq fell in afternoon trading.

By the close of trading, just six stocks were ahead.

Analysts said the fall was on the back of continued nervousness about company earnings and accounting, and there was a complete lack of buyers.

Tom Hougaard, trader at financial bookies City Index, said: ‘‘People are still nervous about entering the market and rightly so.’’

Alex Scott, analyst at Seven Investment Management, said: ‘‘I think we have got something of a buyers’ strike.’’

Telecoms, banks and insurance stocks weighed on the Footsie.

Vodafone shed 6%, off 5½p at 80½p amid accounting worries although this was denied by the company.

BT Group was off 10p at 236p and Cable & Wireless dropped 9½p to 156½p, and mmO2 slid a penny at 41p.

Among the banks, Barclays tumbled by 32p to 503p, Lloyds TSB fell 32p to 605p, Royal Bank of Scotland moved down 88p to £16.85 and Standard Chartered fell 21½p to 661½p.

Traders said the whole banking sector was under pressure on worries about their exposure to stocks, gold, and, in particular, emerging markets.

Insurance firms were sharply lower, with Prudential down 32½p at 521½p and Aviva, the new name for CGNU, off 51½p at 443½p.

Outsourcing firm Capita also fell sharply, off almost 7% on reports of problems in a contract it holds to administer criminal records. Shares were down 12¾p at 282¼p.

Software firm Sage, the last remaining tech stock in the Footsie, was off 3p at 153p.

Among the gloom just a handful of stocks managed to rise. Among them, cigarette firms Imperial Tobacco and Gallaher rose 17p at £11.26 and a penny to 638p respectively, while hedge fund group Man jumped nearly 5%, up 46p at £10.65.

Most corporate news today was restricted to smaller stocks with supermarket chain Somerfield posting its first annual profits for three years.

The group showed sales had slowed in recent weeks and outlined an increase in capital expenditure and its shares fell 10½p to 103½p.

But fibre-optics firm Bookham Technology rose 2p to 71p after revealing plans to close two depots to save cash.

And Debenhams rose 11p to 330p after it said it would buy back £100 million-worth of shares and speed up its store opening programme.

The biggest Footsie risers were Man up 46p at £10.65, Imperial Tobacco up 17p at £11.26, Scottish Power up 3p at 345p, Scottish & Newcastle up 5p to 615p and BAA up 2p to 592½p.

Fallers were Aviva down 51½p to 443½p, Pearson down 63p at 615p, Friends Provident down 12p at 128p, BSkyB down 52½p at 575p and Compass down 30½p to 360p.