FTSE hits lowest point since Dec 1995

London’s FTSE 100 Index fell for the tenth session running today – its longest ever losing streak – as it hit its lowest point since December 1995.

After a rollercoaster ride which saw the index dip below 3600, the Footsie closed at 3603.7, a 18.5 point decline.

Investors had been hoping for some form of rally but in the event it failed to materialise.

Martin Dobson, head of dealing at NatWest Stockbrokers, said: “We are likely to see further weakness. We have not got anything to give this any upward momentum.

“Until we have got the UN weapons inspectors’ resolution on the Iraqi situation we are likely to drift. It could still drift on after that.”

The session’s biggest driver of negative sentiment was a dramatic decline in the dollar on world markets in the face of the growing threat of war. The greenback slumped nearly a cent to 1.6321 dollar, a three-year low against sterling and the euro.

At lunchtime on a day described as critical by market strategists, the index of leading shares had staged a limited fightback after initially falling as nerves about Iraq and corporate profitability resurfaced.

By the close of trading dealers were glad to have escaped a more severe hammering.

Major stocks Granada, Aviva and HBOS had given some stability after the early turbulence.

The three each turned in rises of around 4% to get trading back on track, with Granada, up 3p at 65p, Aviva, up 15.75p at 398p and HBOS ahead 20p at 577.5p.

Legal & General was also up by more than 3% to 81p after it reported strong new business figures despite the poor stock market conditions.

A warning that higher life expectancy meant it would have to boost reserves at the expense of operating profits failed to scare investors.

Elsewhere, banks recovered some of their recent losses with Barclays up 3.25p at 352p, Lloyds TSB up 8.5p at 400p and Royal Bank of Scotland ahead 8p at 1328p.

But drugs giant GlaxoSmithKline weighed on the Footsie, falling 43p at 1087p on a decision to halt US trials of key asthma drug Serevent.

And oil giants BP and Shell were also lower, with BP off 5p at 369p and Shell down 0.5p at 360.5p.

Supermarket target Safeway took back some of its recent losses, closing up 10p at 326p, as it issued a £4.5 billion valuation of half its store portfolio.

Rival Morrisons, which started the bidding frenzy, shed 3% to stand 5.5p lower at 172.5p while another interested party – Sainsbury – rose 7.25p to 246.75p.

The leading Footsie risers were Granada up 3p at 65p, Johnson Matthey up 32.5p at 763.5p, Aviva up 15.75p at 398p, HBOS up 20p at 577.5p and Amvescap up 12.25p at 357p.

The biggest fallers were Dixons down 5.25p at 101.5p, Invensys down 2.25p at 46.5p, Abbey National down 17p at 423p, GlaxoSmithKline down 43p at 1087 and Rolls-Royce down 3.75p at 98p.