The London market closed deep in the red again today as poor payroll figures in the US knocked already fragile investor confidence.
The FTSE 100 Index closed down 76 points at 6224.3, sending London’s leading share index almost back to its New Year opening level of 6220.8.
Strong corporate results from blue-chips failed to provide positive momentum, with the weaker-than-expected labour report in America sparking a sell-off amid heightened concerns over the US economy.
Banks were among the worst hit, littering the fallers board after Royal Bank of Scotland revealed it was the latest firm expecting to be hit financially by the June and July floods.
Claims for its insurance arm, which includes Direct Line, are set to cost RBS around £250 million this year, overshadowing an 11% rise in interim pre-tax profits, to £5 billion. Shares fell 16.5p to 575p as a result.
Mortgage bank Northern Rock also suffered heavily, down 37p at 763.5p, as did Lloyds TSB, off 8.5p at 553.5p, while HBOS dropped 11.5p to 953p and Barclays fell 7p to 679p.
Shares in pub groups continued their descent after yesterday’s news that Mitchells & Butlers’s £4.5 billion property deal was being put on ice due to the current volatility in the debt markets. M&B stock was down 21.5p at 691.5p on top of the 5% falls seen in the previous session.
Fellow pubs group Whitbread was driven 53p lower to 1535p and Punch Taverns, too, felt the pressure, off 40p at 1072p.
Even airline British Airways was unable to remain in positive territory despite strong first quarter results, which had caused shares to surge earlier in the day.
The improvement in profits to £289 million offset lower guidance on revenues growth, which reflects the impact of soaring fuel prices and the weak dollar. BA, fined £270 million earlier this week for colluding on passenger and cargo flight pricing, closed down 1p at £402.75p.
Anglo American also failed to stay in the black even after confirming plans to sell Tarmac in a deal that reports said could net £3 billion, plus first-half earnings that are 22% on higher prices. Shares fell 10p to 2759p.
General insurer Royal & Sun Alliance, however, did hold on to earlier gains, topping the risers board up 2.2p at 131.2p after a broker upgrade, which came ahead of half-year results next week.
In the FTSE 250 Index, engineering group Tomkins surged 7% as analysts upgraded forecasts in the wake of second quarter results. While profits fell, the decline was less than expected as Tomkins shares rose 17.25p to 249.25p.
Car dealership Inchcape continued to benefit from a favourable reaction to results yesterday, rising 18.25p, or 4%, to 487.5p.
The biggest Footsie risers were Royal & Sun Alliance up 2.2p at 131.2p, International Power up 6.5p at 426p, Next ahead 19p at 1887p and Imperial Chemical Industries up 4p at 631.5p.
The biggest Footsie fallers were Old Mutual off 7.7p at 155.1p, Northern Rock down 37p at 763.5p, Punch Taverns down 40p at 1072p and Whitbread down 53p at 1535p.