HSBC fall puts pressure on FTSE

A further fall for market heavyweight HSBC put pressure on the FTSE 100 Index during a downbeat session for the London market today.

A further fall for market heavyweight HSBC put pressure on the FTSE 100 Index during a downbeat session for the London market today.

HSBC was one of the Footsie’s leading fallers – off 5% or 33.5p to 638.5p – as investors continued to speculate about the bank’s need to raise additional capital, possibly through a rights issue.

The rest of the market trod water despite further signs of economic gloom, with the Footsie up just 2.6 points at 4326.8 by mid-morning.

Investors were also watching shares in British Airways after the Heathrow-based carrier said it failed to strike a merger deal with Australia’s Qantas.

The collapse of the talks, which were revealed earlier this month, left shares down 1.1p at 170.9p, having been down by as much as 4% early on.

Elsewhere, the cut in Opec production failed to prop up shares in BP and Royal Dutch Shell after oil prices continued their decline.

BP was 6.75p cheaper at 528.75p, while Royal Dutch Shell was off 6p at 1733p.

The latest economic worries came from record public sector borrowing figures for November, although there was some cheer when retail sales figures showed an unexpected 0.3% increase last month.

Sentiment towards the sector remained downbeat, with Marks & Spencer off 6.75p at 220.75p and Next down 11p at 1101p.

In other corporate news, shares in transport group Arriva rose almost 4%, or 19.5p to 565.5p, after it said it continued to trade in line with expectations. The update contained a warning that fuel costs will rise £60m next year, but investors were comforted by the robust trading performance.

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