FTSE tumbles to 11-week low

Investors returning from the Christmas break were given a jolt today as the FTSE 100 Index tumbled to its lowest close since October 10.

Only three blue-chips made any ground as tension over Iraq and North Korea hit already frayed nerves in the City.

With little support from markets on Wall Street, the Footsie ended a dismal day down 112.7 points at 3829.4 – a drop of nearly 3%.

Banking and drug stocks were among the heavy fallers as were high street retailers as signs of a subdued Christmas on the high street began to emerge.

And with just 488 million shares changing hands, analysts are expecting a depressing end to the year in the City next week.

Peter Cogliatti, trader at Williams de Broe, said: “Trading volumes were very low so you can’t read too much into what happened today.

“But there’s not a lot of confidence around, particularly considering the situation in Iraq and North Korea. The market is nervous.”

Oil giants BP and Shell also fell back as profit taking offset a climb in the oil price above the key 30 US dollars a barrel mark.

The impact of the continuing general strike in Venezuela on oil supplies fuelled the increase but BP fell 14p to 415p while Shell dropped 15p to 401.25p.

Elsewhere banks were also on the slide with Lloyds TSB, down 12p at 437p, Alliance & Leicester, off 26.5p at 728p and HBOS, off 21p at 625p.

Of the other financials moving south, insurer Royal & Sun Alliance fell 7.5p to 116.5p and former CGNU business Aviva dropped 22p to 434.5p.

But the main interest was centred on the retail sector after department store group John Lewis and jewellery chain Goldsmiths posted mixed Christmas updates.

The statements fuelled fears the festive period was nowhere near as buoyant as a year ago.

Among those on the slide were electrical chain Dixons, off 5.25p at 142p and B&Q-to-Comet group Kingfisher, off 2.5p at 211p.

Others down included clothing retailer Next, losing 17.5p to 717p, and Argos owner GUS, off 14.5p at 552p, while Marks & Spencer held firm at 307.75p.

Elsewhere, British Airways ended its first week back in the top flight in drab fashion, closing 4.5p lower at 131.5p – a fall of 3%.

Outside the Footsie, today’s session also marked the departure of transport infrastructure group Railtrack – listed as RT Group.

The stock will now be de-listed but shares rose 1.5p to 253.5p – helped by news that liquidators had agreed the sale of Railtrack Developments’ property portfolio for a higher-than-expected £63 million.

The deal with property group Hammerson should safeguard the 252p to 260p a share payout promised by liquidator Deloitte & Touche.

In the Footsie, the only climbers were BAE Systems, up 3.5p at 127.25p, Reckitt Benckiser, up 20p at 1190p and Bradford & Bingley, up 2p at 288p.

The heaviest fallers were Granada, down 4.75p at 73p, Royal & Sun Alliance, off 7.5p at 116.5p, Invensys, off 3.25p at 50.75p and Aviva, off 22p at 434.5p.