FTSE plunges

The London market gave back early gains to plunge further in the red today after more fears over the health of the US economy sparked a fresh wave of selling.

The Footsie had moved into positive territory on the back of strong corporate results today – up 59.1 points at one point – but lurched back to stand 85.5 points in the red at lunchtime – on 6083.7.

Fresh comments over a potential US recession from former Federal Reserve chairman Alan Greenspan – one of the triggers of the market turmoil on Tuesday - sent traders scurrying to sell as early confidence evaporated.

The early sentiment was helped by healthy results from Royal Bank of Scotland. The bank unveiled annual profits ahead of expectations at £9.19 billion, up from £7.94 billion a year earlier, and reminded investors that it was one of only five FTSE 100 Index companies to have grown profits in each of the last 10 years.

The judder in the market saw RBS give back some of its early gains but the firm still sat on top of the leaders’ board with a gain of 2%, or 43p to 2056p.

There was also a gain of nearly 2% for Sainsbury’s, even though a potential merger with Marks & Spencer was ruled out by the department store chain last night.

Analysts suggested that the interest of M&S may hasten private equity plans to bid for the supermarket chain Sainsbury’s shares were up 9.25p at 520.5p, while M&S shares were down 5.5p to 669.5p.

British American Tobacco was 24p higher at 1573p, as news of a £750 share buyback cheered investors. The maker of Dunhill cigarettes posted annual profits of £2.79 billion, a rise of 7%.

But Norwich Union owner Aviva struggled as analysts expressed disappointment at the performance of its life business in today’s 12% rise in profits to £3.24 billion. Shares were down 40p at 778p.

Mining stocks – which have felt the brunt of the Footsie sell-off this week - suffered again today. Lonmin was down nearly 4% – or 39p – to 779p, Xstrata off 71p at 2324p and Antofagasta 9p lower at 455p.

Elsewhere, camera retailer Jessops extended previous losses after it issued a profits warning yesterday as digital camera sales continued to decline. Shares were 27%, or 20.25p, down to 54.5p, after closing down 30% on Wednesday.