London market runs out of festive steam

The London market’s festive rally ran out of steam today during a lacklustre start to the last full trading session of the decade.

The FTSE 100 Index, which yesterday climbed to levels not seen since before the collapse of Lehman Brothers in September 2008, was 18.2 points lower at 5419.4 by mid-morning.

The picture was mirrored in France and Germany, where markets were under pressure following the end of Wall Street’s six-day rally last night.

Asian markets earlier struggled, with the Nikkei index down nearly 1% after a heavy fall for Japan Airlines amid fears the carrier could end up in bankruptcy proceedings as part of a turnaround plan.

The rally in London has added more than 200 points in the last week, although traders warned thin holiday volumes distorted the picture.

Cameron Peacock, an analyst at IG Markets, said: “The fact remains that stocks have rallied a long way over the last nine months and as a result are starting to look a little toppy.”

Heavyweight mining stocks performed well in the rally but they faltered today as profit-takers moved in, leaving Rio Tinto 2% or 65p lower at 3355p and Anglo American 38p cheaper at 2691p.

However, it has been a bumper year for investors in the sector after Kazakhmys shares rose more than 450% in the 12 months and Vedanta Resources lifted nearly 300%. Today, they were down 8p at 1302p and 23p to 2597p respectively.

In a quiet session for corporate news, shares in property firm Segro were 0.7p higher at 344.4p after it announced its exit from the retail sector with the £26.9m (€29.7m) sale of its stake in a shopping centre partnership with Tesco.

British Land, which has bought the holding, rose 2.1p to 464.4p.