Torrid start for London market

Britain’s biggest companies endured a torrid start in the City today as the FTSE 100 Index moved to within a whisker of recent lows.

A rollercoaster morning saw the top flight index recover from an early slide before tumbling again as uncertainty dogged investors.

Fears over corporate profitability continued to sway sentiment with the US quarterly season moving into full swing later today.

By mid-morning the Footsie was off 57.4 points at 3685.0, just a dozen points off last month’s six-year closing low.

Most of the City’s heavyweights were falling back from earlier gains with banks and telecoms among those in negative territory.

UBS Warburg cut its price targets for Barclays and Royal Bank of Scotland which caused them to fall 3.5p and 19p to 386.5p and £12.46 respectively.

HBOS was also on the slide, down 14p at 564.5p, while HSBC was down 12.5p at 646p and Abbey National lost its momentum, falling 9p to 584.5p.

Of the telecoms, Vodafone fell 1.75p to 87.75p, mmO2 dropped 0.75p to 42.5p and Cable & Wireless moved down 3p at 117.5p.

Oil giants BP and Shell were also weaker, reflecting lower oil prices, with BP off 5p at 402p and Shell down 7p at 377p.

The Footsie had recovered from a 40 point drop early on to move up 16.7 points in the first hour as bargain hunters stepped into the fray.

Analysts said the performance for the rest of the day was likely to rest on early trading on Wall Street.

The Dow Jones Industrial Average lost 215 points last night to 7286.77 but City watchers were predicting a better start this afternoon.

In London, only a handful of stocks were making progress including food retailers Safeway, up 5.25p at 189p and Morrisons, up 0.5p at 199.5p.

Outside the Footsie, sensor systems group First Technology fell 4% after reporting there had been little improvement in trading conditions.

The group, which is closing its manufacturing facilities in Farnborough, was 9p cheaper at 198.5p.