Heavy losses for FTSE

Investors turned against financial stocks again today as the sector pulled the FTSE 100 Index down more than 2%.

The falls were mirrored in the US as evidence of the poor state of the world's economy mounted. The FTSE closed down 105.1 points at 4190.1, reversing all of yesterday's gains.

A raft of poor financial news came from North America, including Ford Motor Corporation's report that it had made a loss of US$14.6bn (€11.25bn) - the biggest in its history. Investors were also spooked by official US figures showing monthly unemployment reached its highest level since records began in 1967.

The Dow Jones Industrial Average was down 114.9 points in early trade at 8,260.9.

In London, the private equity firm 3i lead the fallers board as sentiment remained weak following a trading update yesterday.

3i dropped nearly 20% - 41.25p at 210p - on market speculation that the company may be considering a move to raise funds through a rights issue.

Banks were back in the red, with Lloyds Banking Group down 13%, or 11.9p at 89p.

Barclays ended a three-day rally with a 6% fall, down 6.7p to 100.3p.

Insurers were also suffering after their brief respite earlier this week.

Legal & General was the hardest hit, down 11% or 6.6p at 60.7p after its failure to update on its capital surplus offset otherwise better-than-expected annual sales figures.

L&G posted a 3% rise in 2008 new business sales at £1.49bn (€1.64bn). However, it was hit hard by the capital surplus decision, given ongoing concerns over the sector's financial strength in times of falling equity markets.

AstraZeneca fell nearly 7% after the group confirmed today another 6,000 jobs are being axed worldwide. The additional job cuts add to an existing programme to reduce its workforce, which will now see 15,000 job losses across the drugs giant's global operations. Shares were off 180p at 2680p.

Risers were thin on the ground, but miners saw a change of fortunes, having contributed to the market's losses for much of the day.

Xstrata saw a dramatic recovery after early heavy falls following its request to shareholders for more funds. Xstrata rose 22.5p to 645.5p.

Oil major Royal Dutch Shell held firm after posting annual profits of $31.37bn (€24.16bn), up 14% after oil prices peaked at $147 a barrel in the summer. It is reported to be a record figure for a European company.

The results were towards the bottom end of City expectations, but Shell cheered investors by announcing an 11% increase in its fourth quarter dividend. Shell rose 10p to 1716p.

BP, which is due to post results next week, was 5.25p lower at 499p.

Meanwhile, BSkyB rose 10p to 500p as its shares held on to the feel-good factor seen after well-received interim results on Wednesday.

The biggest Footsie risers were Xstrata up 22.5p at 645.5, Thomas Cook Group, up 5.2p at 200, Randgold Resources up 80p at 3,120p and British Sky Broadcasting up 10p at 500p.

The biggest Footsie fallers were 3i Group down 41.25p at 210p, Lloyds Banking Group down 11.9p at 89p, Old Mutual off 6.6p at 53.1p and Legal & General down 6.6p at 60.7p.