The FTSE 100 Index fell back below the 6000 mark today as Wall Street jitters put the London market on the back foot.
Downbeat results from several heavy-hitting US corporates caused early losses in New York in an uncertain beginning to trading.
The Footsie ended the session 65.8 down at 5980.4, ending two days of gains for the index.
Banking shares had been some of the day’s big winners early on as hopes of a Treasury-backed solution to the credit crunch gave the sector a lift.
By the day’s end just three were in the black, led by Britain’s biggest mortgage lender Halifax Bank of Scotland, up 10.5p to 550p.
Alliance & Leicester gained 7p to 510p respectively, with Lloyds TSB clinging onto a 1p gain which took the shares to 442.75p. Barclays ended up losing 0.25p at 478.75p.
The mood was deflated after US banking giant Merrill Lynch posted a near two billion US dollar first quarter loss after more hefty asset write downs. Worse than expected results for Pfizer and Nokia added to the gloom.
Back in London, the biggest riser was brewing giant SABMiller which rebounded after yesterday’s falls following a trading update. Shares stood 59p higher at 1179p, a gain of more than 5%.
The other big move of the session came from closed life fund Resolution after the Financial Services Authority approved its change of control through a proposed takeover by Pearl Assurance. Resolution shares were 18.5p higher at 715p.
The retail sector continued to be dogged by uncertainty amid challenging trading conditions. Next was high on the Footsie fallers board with a drop of 45p to 1103p, while Marks & Spencer dipped 11p to 360.25p.
A rare bright spot came from high street operator WH Smith, which posted an 8% rise in half-year profits after stronger trading at its travel locations offset a sales drop on the high street. Shares were up 9.25p to 375p.
The building sector was also under pressure in the wake of a gloomy update from housebuilder Taylor Wimpey. The group warned of worsening market conditions as buyers were squeezed out by dearer mortgage deals, and shares fell 4%, or 6.25p to 158.75p. Rival Persimmon also lost 23p to 659p, with building supplies firm Wolseley easing too, falling 22.5p to 529.5p.
Thomson Reuters also fell heavily on its first day’s trading as a combined company.
Home shopping and educational supplies group Findel was far and away the biggest faller in the FTSE 250 Index, falling 37%, or 164.25p, to 280p, after issuing more gloomy retail news. The company warned that profits will be below previous expectations due to higher bad debt provisions.
The Footsie’s four biggest risers were SABMiller up 59p at 1179p, International Power, Resolution up 18.5p to 715p and Amec which gained 15.5p to 769.5p.
The Footsie’s four biggest fallers were Thomson Reuters which lost 160.4p to 1560p, Eurasian Natural Resources down 68p to 1272p, Wolseley off 22.5p to 529.5p and Next, which lost 45p to 1103p.