FTSE falls almost 2%

The FTSE 100 Index ended the day almost 2% down today as the worst snow in 20 years meant thin trading volumes in London.

But the dealers who overcame transport chaos to reach their desks still managed to keep blue-chip stocks mired in negative territory and the Footsie closed down 71.9 points to 4077.8.

The slump mirrored a similar sell-off across the Atlantic, where the Dow Jones Industrial Average dropped back below the 8,000 mark.

This was after gloomy official US economic figures showed consumer spending falling for a record sixth straight month in December as recession-battered US households upped their savings rates.

In London corporate news was thin on the ground, but financial stocks came under pressure and downbeat manufacturing data added to the economic gloom.

Barclays saw its fortunes reverse yet again after last week’s spectacular 107% rise in its share price.

The bank dropped almost 12% after ratings agency Moody’s cut its long-term rating on the bank, amid fears of heavy losses to come. Barclays slid 11.2p to 94.9p.

Elsewhere in the sector, beleaguered Royal Bank of Scotland was off 1.6p at 20.4p, while HSBC slid 16.25p to 527.p.

Hedge fund Man Group was the Footsie’s biggest faller, down 22.75p at 183.5p.

British Airways, which was forced to cancel all flights from Heathrow until 5pm today because of the dramatic snowfall, fell 4p to 116.1p.

Rio Tinto was one of only a handful of risers today. The mining giant gained 6% after confirming discussions with state-owned Chinalco over the possibility of it acquiring minority interests in various businesses of Rio.

The deal would pave the way for the Chinese Government to up its stake in the firm. Shares were up 100p at 1606p.

Drugs firm AstraZeneca also struggled onto the risers board with shares up 23p at 2694p.

In the FTSE 250, transport group Go-Ahead, which runs the Southeastern rail services, cancelled all trains into and out of London. Go-Ahead’s shares fell 49p to 934.5p.

Back in the top flight, inter-dealer broker Icap was also under pressure as investors reacted badly to news that it could buy clearing house LCH Clearnet as part of a consortium. Icap was 16.5p lower at 219.5p, a fall of 7%.

The leading riser in the second tier was data centres provider Telecity, which impressed analysts with full-year results and a confident outlook for 2009. This pushed the firm up 21p to 191p, or 11%.

Gem Diamonds was one of the FTSE 250’s leading fallers after the company released a trading statement announcing the company had been badly affected by the global economic slowdown and the resulting drop in prices. Shares fell 30.25p to 192p.

The biggest Footsie risers were Rio Tinto up 100p at 1606p, Autonomy Corporation up 22p at 1116p, AstraZeneca up 23p at 2694p and GlaxoSmithKline up 10.5p at 1230p.

The biggest Footsie fallers were Man Group down 22.75p at 183.5p, Barclays down 11.2p at 94.9p, Hammerson off 38p at 367.75p and Standard Life down 19p at 200.75p.