FTSE slides towards another loss

The FTSE 100 Index was heading towards its eighth consecutive session of losses today after sliding below the key 4400 barrier.

Rising oil prices and prospects for higher interest rates were unsettling investors as the Footsie moved 17.6 points lower to 4385.7 by mid-morning.

A respite from the sky-high fuel costs looked to be over after a barrel of crude oil traded above 39 US dollars in New York overnight after sabotage cut Iraqi exports in half.

Worries over interest rates resurfaced when official figures revealed manufacturing output grew by 0.5% in May. Analysts said this may lead to the Bank of England adopting a more hawkish stance towards higher borrowing costs.

Supermarket chain Morrisons was in the red for a third consecutive session after last week’s profits warning. The stock was among the heaviest Footsie fallers, losing nearly 2% of its value – down 3.25p to 188.25p.

Other supermarkets were dragged down behind Morrisons, with rival Sainsbury’s losing 1% or 3p to 268p. Tesco also weakened a penny to 259p.

Financial stocks were under pressure with Abbey National down 2% or 10.25p to 477.5p, Northern Rock off 13.5p at 690p and Bradford & Bingley 8.5p cheaper at 455.5p.

Severn Trent was one of the few groups in the black after announcing a new chairman and deputy chairman – shares lifted 3p to 797.5p.

With no blue chip companies updating the market, groups in the lower ranks were in focus.

Plant hire group Ashtead saw its shares rise 23% or 6.25p to 34p after posting higher-than-expected annual profits and hailing a return to financial stability.

Shares in Aga Foodservice lifted 4% or 9p to 232p after the kitchen equipment group said profits during the first six months of 2004 would be ahead of the £14.8m (€22m) posted last year.