US market fears sends FTSE tumbling

Further fears over the US economy sent the London market tumbling below the key 6000 barrier today.

Further fears over the US economy sent the London market tumbling below the key 6000 barrier today.

UK blue chips dived in response to heavy falls on Wall Street after smaller-than-expected first quarter profits from US conglomerate General Electric and dire consumer confidence figures.

The FTSE 100 Index closed down 69.6 points at 5895.5, having earlier lifted above 6000.

The Dow Jones Industrial Average sank more than 140 points in early trade after the GE news and data showing that US consumer sentiment is now at its lowest level in 26 years.

In London, banking shares were among those worst affected, with Lloyds TSB down 13.25p at 433p and Barclays 10.25p lower at 453p.

Given GE’s jet engine exposure, the results had a dramatic impact on defence stocks, with BAE Systems plummeting 5%, or 24.25p, to 475p. Rolls-Royce was also hit, down 14p to 418.25p.

Elsewhere, Dairy Milk maker Cadbury was on the back foot, shedding 3% after trading figures received a lukewarm reaction in the City.

A continued strong performance in gum meant confectionery revenues rose 7%, but Cadbury offset this by admitting it lost market share in chocolate because of its refusal to engage in a price war over Easter.

Shares were down 3% or 15p at 563.5p.

Friends Provident was also moving lower, off 4.8p at 130.6p, after the Financial Times reported that US private equity firm JC Flowers may end its takeover interest in the life assurer.

ITV enjoyed better fortunes, securing its place as one of the market’s top risers with a gain of 0.4p to 61.9p, as investors eyed a possible bargain after the broadcaster’s shares fell to a new record low. The rally was helped by a note from Credit Suisse, which said it remained optimistic about the group’s advertising outlook.

Amec was also given a lift by a broker note, with shares soaring 20.5p to 741p, or 3%. Upgrades from the same broker for Vedanta Resources propelled the miner to the top of the Footsie risers board, ahead 4%, or 85p, to 2365p.

In the FTSE 250 Index, DSG International fell 1.25p to 58.25p, adding to the 9% fall seen yesterday after a second profits warning this year.

Barratt Developments gave back an initial gain of 3% to stand 0.75p lower at 369p. Shares had earlier rallied on reports that it was considering the sale of its commercial property division to ease its £1.7 billion debt burden.

Taylor Nelson Sofres, the market research firm, clung to gains after it eased the nerves of investors by revealing steady trading. Shares rose 5.75p to 176.5p.

Debenhams was also higher, up 2.5p at 60.25p, as traders awaited the publication of half-year results on Tuesday.

The four biggest Footsie risers were Vedanta Resources up 85p at 2365p, International Power ahead 12.5p at 432.5p, Amec up 20.5p at 741p and Sainsbury’s up 8.75p at 362.75p.

The biggest Footsie fallers were BAE Systems down 24.25p at 475p, Vodafone down 6.9p at 152.2p, Icap off 21.5p at 570.5p and Friends Provident down 4.8p at 130.6p.

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