FTSE slump continues

The recent slump in the FTSE 100 Index continued today as persistent worries over the health of the US and Japanese economies weighed on confidence.

While the London market steadied after yesterday’s 2% slide, the Footsie was still in negative territory with a drop of 25.8 points to 5130.1.

Investor sentiment has been shaken by a string of below par updates on the US economy, including dismal home sales figures on Tuesday.

The world’s biggest economy will be further tested this week with the release of figures on durable goods orders, consumer confidence and revised second quarter GDP, as well as the latest speech on the state of the economic recovery from Federal Reserve chairman Ben Bernanke.

The mood in Japan was also uncertain after figures today showed that the country’s exporters were feeling the pinch after demand from overseas customers slowed for the fifth consecutive month in July.

This caused Tokyo’s Nikkei 225 to fall 1.6% overnight and came after the Dow Jones Industrial Average closed 1.3% lower at 10,040 after briefly falling below the 10,000 barrier for the first time since early July.

US markets were expected to open lower in today’s session.

The fallers board in London featured a number of resources-based stocks as investors continued their flight from risk.

Tullow Oil dropped 74p to 1223p and Antofagasta fell 14.5p to 997.5p, while BP extended the losses seen in recent days with a decline of 6.95p to 370.5p.

Stocks on the way up included some of those with half-year results out today.

The biggest rise in the FTSE 100 Index came from Admiral Group after the car insurer reported a 21% rise in pre-tax profits to £126.9m (€154.9m) in the first six months of the year. The figures were better than expected and resulted in shares rising 3% or 52p to 1525p.

Support services firm Serco was another blue-chip riser after its adjusted profits improved 19% to £110.2m (€134.5m) and it said it stood to benefit as many government and commercial customers looked to reduce costs.

The half-year figures were in line with expectations and caused the company’s shares to rise 15.5p to 575p, a gain of 3%.

Temporary power firm Aggreko was not so fortunate as it faded 30p to 1399p. The stock, which has risen sharply in the last year, was under pressure despite posting a 50% hike in its dividend and forecasting higher than expected profits.