FTSE plummets

The FTSE 100 Index dived more than 2% for the second successive session today as a fresh wave of economic gloom hit stocks.

The FTSE 100 Index dived more than 2% for the second successive session today as a fresh wave of economic gloom hit stocks.

Forecasts of lower growth in the euro zone and some downbeat data in the US saw banks and dollar-facing firms take the main punishment in London.

The Footsie closed down 137.6 points at 5362.1 – a drop of 2.5%. The top flight index has now lost 4.6% over the past two sessions amid the economic gloom.

Pressure mounted today from Wall Street, where the Dow Jones Industrial Average was down 2% after sluggish back-to-school sales reports and mounting unemployment claims. The European Central Bank also downgraded its forecast for euro zone growth next year to 1.2% from 1.5%.

With both the ECB and Bank of England holding interest rates steady today, banks dominated the Footsie fallers board. Halifax Bank of Scotland closed down nearly 7%, or 20.75p to 282.5p. Barclays was close behind, down 21p to 329.25p, and followed by Lloyds TSB which shed 17.25p to 286.25p.

Retailer Marks & Spencer was another hefty faller, down more than 5%, or 14p to 247p.

US-facing building supplies firm Wolseley lost 22.75p to 450.25p, with another big operator across the Atlantic, Rolls-Royce, down 18.75p to 381.5p.

Miners also suffered as commodity prices fell further. Ferrexpo was down 13.25p to 198p, with Anglo American also a main casualty, off 129p at 2430p.

Transport-related stocks lost some of the gains seen in recent days after oil prices had fallen below 110 US dollars a barrel. British Airways was 12.5p cheaper at 250p, while cruise ship firm Carnival fell 60p to 1957p.

Unilever was the biggest top flight riser, up 91p to 1581p, after the appointment of Nestle executive Paul Polman as successor to current chief executive Patrick Cescau. The former Procter & Gamble executive is expected to lead a more aggressive pursuit of sales growth at the Dove soap maker.

Whitbread was also higher after it said the economic downturn continued to help its Premier Inn budget hotel brand and the value-for-money offerings served at its restaurant chains, such as Beefeater.

With like-for-like sales up 7% in the 24 weeks to August, Whitbread shares rose 7p to 1127p.

BG Group joined a small group near the top of the risers board after market talk of a a takeover bid from oil giant Exxon Mobil. Shares were further helped by a broker upgrade, leaving the stock 8p higher at 1055p.

Elsewhere, shares in camera retailer Jessops were down 6% amid continued fears about current trading. The stock fell 0.25p to 3.6p.

The Footsie’s four biggest risers were Unilever, up 91p to 1581p, Friends Provident up 1.6p at 100.8p, Tullow Oil up 6.5p at 756.5p and Cadbury, which closed up 5p at 622p.

The four biggest fallers were HBOS, down 20.75p to 282.5p Ferrexpo down 13.25p to 198p, Barclays down 21p to 329.25p and Lloyds TSB, which ended the day down 17.25p at 286.25p.

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