Negative IMF outlook pushes FTSE into the red

London’s leading shares index fell into the red today after a report from the International Monetary Fund (IMF) warned that time was running out to tackle threats to the economic recovery.

The FTSE 100 Index closed more than 1% lower, falling 75.3 points at 5288.4, as the IMF urged political leaders to find a lasting solution to the economic problems in the US and eurozone.

The Greek debt crisis rumbled on as the cabinet met to discuss speeding up austerity measures required by European finance leaders to release further bailout funds to the beleaguered country.

However, banking stocks shrugged off the IMF report and lack of resolution to the Greek sovereign debt woes as Lloyds Banking Group topped the risers board with a climb of 1.9p to 36.1p.

The heavily weighted mining sector dragged the London market lower after Rio Tinto said customers have asked for deliveries of metals to be delayed - signalling that global economic weakness is hitting demand for commodities.

Copper giant Antofagasta hit the bottom of the FTSE 100 Index with a fall of 83p to 1114p, while Rio Tinto lost 148.5p at 3389p and BHP Billiton shed 76.5p at 1888.5p.

The pound fell to 1.56 against the US dollar and to 1.13 against the euro after minutes from a Bank of England meeting earlier this month showed members moving closer to enacting further quantitative easing – a move which would weaken the value of sterling.

Elsewhere, traders awaited the outcome of the US Federal Reserve’s decision on whether to implement new measures to stimulate the US economy, which came after the UK market closed.

Grolsch owner SABMiller slid 36p to 2185p after it upped its takeover bid for rival brewer Foster’s to AUD$11.5bn.

The new offer has won the backing of the Australian firm’s board, just a week after Foster’s urged its shareholders to reject SAB’s “inadequate” previous offer.

In the FTSE 250 Index, a new chairman gave beleaguered travel company Thomas Cook a lift. Frank Meysman, a veteran of Procter & Gamble, Douwe Egberts and Sara Lee, takes over as chairman designate from October 1 and will take over fully in December. Shares in Thomas Cook today rose by 0.3p to 41.6p.

Online retailer Ocado slumped another 11% or 13.2p to 102.5p on reports Tesco is set to launch a Christmas price war. Ocado matches prices against 7,400 Tesco products and City analysts said the supermarket’s move could hit it hard.

In other corporate news, shares in JD Sports Fashion were more than 1% lower after it said £700,000 of stock was looted in last month’s riots. Shares fell 10p to 830.5p despite the firm reporting an improved sales trend at the start of its second half-year period.

The biggest Footsie risers were Lloyds Banking Group up 1.9p at 36.1p, Essar Energy ahead 7.1p at 269.2p, National Grid up 8.5p at 647p and Royal Bank of Scotland ahead 0.3p at 23.4p.

The biggest Footsie fallers were Antofagasta down 83p at 1114p, Ashmore Group off 18.4p at 391.6p, Rio Tinto down 148.5p at 3389p and Aviva off 12.7p at 295p.