US doubts prompts FTSE fall

The FTSE 100 Index plunged deep into the red today as doubts over the US economic stimulus plan rippled through global markets.

The FTSE 100 Index plunged deep into the red today as doubts over the US economic stimulus plan rippled through global markets.

Wall Street was closed yesterday, but the Dow Jones Industrial Average swiftly fell more than 3% on opening as US car giants rushed to meet deadlines for plans on how they aim to repay huge public loans.

The Footsie followed the downbeat mood as President Obama prepared to sign his US$787bn (€625.3bn) package into law. It closed 100.6 points lower at 4034.1 after briefly dipping below 4,000 for the first time since January.

Elsewhere in Europe, Germany's Dax lost 3.4% and France's CAC 40 shed more than 2%.

In the UK, figures showing that UK inflation eased at a slower-than-expected pace - falling from 3.1% to 3% last month - also failed to boost investor sentiment.

The banking sector was a major casualty of the falls with Lloyds Banking Group coming under more pressure after last week's shock HBOS profits warning.

Under-pressure property firms were also suffering today, with Land Securities dropping 9% after indicating yesterday it may follow its rivals in asking shareholders for additional cash.

As well as a fall of 53p to 568.5p for Land Secs, Hammerson was off 36p to 351.25p and British Land dropped 13.5p to 436.75p, a fall of 5%.

Their FTSE 250 counterparts also felt the heat, with Brixton the worst hit in the second tier. The stock fell 19p to 48p, a fall of almost 40%.

Back in the top flight, Standard Chartered and HSBC joined Lloyds on the fallers board, sliding 69.5p to 710p and 36p to 494.5p respectively.

But Royal Bank of Scotland - the part-nationalised bank which today said it was slashing bonuses by more than 90% to £175m (€197.8m) - was a riser, adding 0.3p to 20.7p.

Legal & General was also a prominent gainer after it issued a statement attempting to address concerns about its capital position.

Investors were reassured by the company's capital surplus of more than £1.6bn (€1.8bn) at the end of December and shares rose 1p to 45.3p, having at one stage lifted more than 10%.

Hotels group InterContinental was among the Footsie's best performing stocks after the Crowne Plaza and Holiday Inn firm met forecasts with a 13% rise in 2008 profits.

Shares were 12.25p higher at 487.25p, even though it issued a downbeat assessment on trading prospects for this year.

Outside the top flight, Laura Ashley shares fell 0.25p to 10.75p after the retailer warned profits for the year to January 31 would miss market expectations.

Numis Securities cut its 2008/09 profits forecast for the group to £9.1m (€10.3m) from £16.1 m (€18.2m) after the company said promotional activity and the weak pound had impacted margins.

The biggest Footsie risers were Randgold Resources up 245p at 3498p, InterContinental Hotels ahead 12.25p at 487.25p, Legal & General up 1p at 45.3p and Scottish & Southern Energy up 20p at 1218p.

The biggest Footsie fallers were Hammerson down 36p at 351.25p, Standard Chartered off 69.5p at 710p, Eurasian Natural Resources down 34.25p at 352.75p and Lloyds down 4.9p at 51.5p.

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