World markets hammered

World markets took a hammering today as worries about US consumer confidence overshadowed figures showing Japan’s exit from recession.

Shanghai’s market led sharp declines across Asia, plummeting nearly 6%, while futures markets pointed to big falls on Wall Street as investors rushed to take profits following the global market’s recent strong run.

With little corporate news to divert attention, the FTSE 100 Index followed suit with a fall of 1.7% or 82.8 points to 4630.4 by mid-morning.

Worries about the pace of economic recovery in the US were fuelled by a report on Friday showing weaker than expected consumer confidence in early August. Investors were little comforted by the news from Japan, where the economy grew 3.7% at an annual pace in the second quarter.

The growth fears caused miners to fall by as much as 6%, with Xstrata down 43.5p at 741.5p and Antofagasta off 39p to 703.5p.

There were only three stocks on the Footsie risers board, led by insurer Aviva after a gain of 7.5p to 379.3p.

Property firms were also pulling the London market lower as last week’s excitement over a possible £10bn (€11.6bn) bid for British Land started to fade.

Liberty International dropped 24.7p to 463p, Land Securities fell 21p to 610p and British Land declined 18.9p to 493.6p.

Weekend speculation regarding a possible £500m (€579m) rights issue by Barratt Developments caused its shares to decline 16.5p to 223.6p, a fall of 7% to leave Barratt at the top of the FTSE 250 Index fallers board.

In contrast, marine electronics specialist Raymarine surged 41% or 5.25p to 18p after a report said technology firm Garmin was interested in a takeover. Raymarine is looking for a partner after warning in June that it was operating close to the limit of its current bank facilities.