Heavy selling of financial shares saw the London market head towards the 6,000 level today as stocks plummeted around the world.
The FTSE 100 Index closed at 6000.7 – down 160.5 points – its lowest closing level since October.
Trading was impacted by rising fears over the levels of defaults on sub-prime mortgages in the US, which has sparked concerns over the health of the wider US economy.
HBOS topped the Footsie fallers’ board, with a loss of 62p to 1017p, while Barclays was off 32.5p to 673.5p and Royal Bank of Scotland lost 93p to 1955p.
HSBC, which has already taken a hit on its exposure to US sub-prime mortgages following its profits warning last month, was down by 2%, or 22.5p to 880p.
Meanwhile, fund managers with strong exposure to US markets continued yesterday’s slide with Man Group losing 20.75p to 492.5p and Old Mutual falling 7.5p to 159.25p.
On the upside, Home Retail Group rose 1.75p to 423.75p as it said it now expected to post results ahead of expectations after sales grew at both its Argos and Homebase chains in the last few weeks of the year.
The news served as a boost to Curry’s owner DSG International which topped the blue-chip risers with a gain of 3p to 169p, while B&Q owner Kingfisher also benefited from the upturn in the home improvement market as it closed up 3.75p at 254p.
Rumours of private equity interest added a further boost to the stock, while Sainsbury’s was also higher, up 9p to 530p, after news that the CVC-led consortium had approached the retailer offset concerns that a bid could be scrapped.
Anglo American led the mining sector lower with a loss of 128p to 2354p, while Antofagasta slipped 21p to 448p and Rio Tinto eased 99p to 2582p.
Insurer Legal & General fell almost 5%, or 7.5p to 146.5p, despite posting a 13% rise in operating profits to £1.23bn in a strong set of annual results. More Than insurer Royal & Sun Alliance was also off 5.25p to 158.75p and Prudential closed down 26.5p at 643p ahead of its annual results tomorrow.
In the FTSE 250 Index, shares in PartyGaming rose 4.75p to 42.75p – a gain of almost 13% – amid rumours that the US could relax its internet gaming restrictions.
The sector also drew strength as traders pondered further consolidation in the sector, possibly involving the long-awaited acquisition of 888 Holdings by Ladbrokes. 888 closed up 4.5p at 120.5p, although Ladbrokes slid 10.75p to 396.5p.
Transport group Stagecoach managed to hold on to its early advances after it announced plans to return £700m to shareholders and said results for this year and the next looked set to hit the top end of current estimates. The stock closed up 1p at 161.75p.
The biggest Footsie risers were DSG International ahead 3p at 169p, Sainsbury up 9p at 530p, Kingfisher ahead 3.75p at 254p and Home Retail Group up 1.75p at 423.75p.
The biggest fallers were HBOS down 62p at 1017p, 3i Group off 61.5p at 1075.5p, Anglo American down 128p at 2354p and Legal & General off 7.5p at 146.25p.