London market in the doldrums

The battered London stock market was in the doldrums again today as a renewed wave of selling gripped traders.

The battered London stock market was in the doldrums again today as a renewed wave of selling gripped traders.

By lunchtime the FTSE 100 Index was 26.8 points lower at 3463.2, although shares staged a recovery from early morning trading, when the index plunged by almost 100 points.

The tumble is a further disappointment for investors, who watched hopefully yesterday as the Footsie paused for breath following an unprecedented 11-day losing streak which saw it hit seven-year lows.

But, despite closing slightly ahead last night, shares turned tail and dived lower on the market’s opening this morning, as concerns over potential war with Iraq, global economic growth and corporate earnings weighed on shares.

Tom Hougaard, trader at City Index, said: “Markets are emotional right now, people are really nervous and this nervousness spills out to produce volatility.

“Its a trader’s market but not an investor’s market.”

Fears the US markets will open sharply lower on their opening this afternoon also hurt the mood.

In London, heavyweight telecoms, banking and insurance shares bore the brunt of the falls although rises from oil firms helped offset some of the losses.

Among the banks, Abbey National fell 13.5p to 383.5p, while Lloyds TSB dropped 2.25p to 372.25p and Barclays fell a penny to 333.25p.

Northern Rock also eased back, down 19p to 555p, despite kicking off the banking reporting season with an 18% jump in full-year profits.

Of the telecoms, mobile phone giant Vodafone was off 3% or 3p to 109.25p, mmO2 was down 0.75p at 46.75p and BT Group tumbled 6.25p to 165.75p.

And insurers were also taking another hammering with Legal & General off 0.5p to 74.25p and Prudential off 3.25p at 350.75p.

Fresh fears about the state of FTSE 250 insurer Britannic’s financial health saw it slide 27%, or 31.5p to just 83.5p – it was trading at 765p a year ago.

Another faller was British Airways, which slid a hefty 6%, or 6.25p to 103.75p, as fears of the impact war with Iraq could have on its business.

But gains by oil companies helped offset some of the losses, with Shell up 2p at 355.5p and BP 2% higher, up 8.75p at 371.25p.

Among other smaller stocks, retailer WH Smith tumbled 4%, off 11.25p to 285p, after disappointing the market with a poor Christmas trading update.

Heavy discounting by the group’s high street rivals saw like-for-like sales at WH Smith fall 3% over the festive period.

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