Footsie slips below 4,000 mark

The FTSE 100 Index slid back below the 4,000 mark today as banking and insurance stocks continued to weigh on the market.

By the close of trading the Footsie was down 44 points at 3957.4, as investors remained in wary mood.

Yesterday’s dire profits warning from insurer Britannic continued to hit sentiment and contributed to a disappointing day’s dealing.

In addition, a lacklustre opening on Wall Street weighed on London. The Dow Jones Industrial Average slid in early trading as investors took profits after a surge yesterday, but then pulled back to hover around its opening level.

Monday’s surge on the Dow came as investors looked forward to George W Bush unveiling a larger-than-expected stimulus package of $600bn (€924bn) to boost America, and the market was today treading water ahead of the president unveiling his proposals in a speech in Chicago this evening.

In London, insurance and banking stocks were among the largest fallers.

Prudential was down 17.5p at 431p, Aviva off 12.5p at 450.5p, Royal & Sun Alliance 0.5p lower at 126p and Legal & General 3.25p cheaper at 93.25p.

Banking stocks were also dragged down, with Lloyds TSB off 10.25p at 424.25p, Abbey National down 24p at 506p and HBOS 16.5p lower at 642.5p.

The exception in the sector was FTSE 250 stock Britannic, which showed tentative signs of a recovery – up 8.5p at 172.5p.

The group sparked the sell-off yesterday after warning that fragile stock market conditions could force it to defer annual bonus payments on savings plans.

Other fallers in the blue chip index included British Airways, off 4%, or 6.25p at 138p, on concerns about the impact a possible war with Iraq may have.

However the mood was brighter among the retailers, which had a better day following a volatile time of late ahead of a rush of crucial Christmas trading statements.

The sector has been hit by worries that Christmas trading had been poor, but shares generally gained today as the mood improved.

Retailers were also given a lift by smaller firm Dolcis-to-Bay Trading retailer Alexon, which achieved a 2% rise – up 4p to 199p – after it said it was likely to beat profits targets despite the impact of slower Christmas sales growth.

Among the blue-chips, Next, which issues its trading update tomorrow, rose 13.5p to 746p, while Boots lifted 9p to 592p and Marks and Spencer rose 1.5p to 323p.

But Dixons ended the day down 1.5p at 147p and Kingfisher 0.5p cheaper at 214.5p.

Elsewhere, aerospace and engineering components company Cobham rose 2% – up 22.5p at 1070p – after announcing three acquisitions and describing trading during 2002 as in line with expectations.

But market research firm Taylor Nelson Sofres slid after warning it would not meet margin targets this year. Shares fell 6%, off 9p at 142.5p.

The biggest Footsie risers were Safeway up 6.25p at 213.5p, GKN up 5.75p at 216.5p, Canary Wharf up 5.5p at 245p, BHP Billiton up 6p at 331p and Next up 13.5p at 746p.

Fallers were Abbey National down 24p at 506p, British Airways down 6.25p at 138p, Prudential down 17.5p at 431p, Hays down 3.5p at 91.25p and Friends Provident down 4.25p at 115p.