FTSE falls on global growth fears
A weak start for London shares turned into a full-blown rout today as investors ditched risky stocks on more global growth fears.
The FTSE 100 Index finished more than 2% lower, off 123.35 points at 5366.8, after overnight disappointment at the US Federal Reserve’s failure to signal more stimulus measures fuelled a wider concern about the recovery.
Commodity stocks were the biggest casualties, with oil prices also sharply lower on weekly figures showing weaker demand at US refineries. Market heavyweight BP was 2% down or 11.3p lower at 440.95p and Royal Dutch Shell fell 57.5p to 2330.5p while silver miner Fresnillo slumped 187p to 1494p.
The euro dropped to its lowest level against the dollar for nearly a year, reflecting investors’ nerves that the eurozone crisis is still not under control. The pound strengthened to 1.19 against the single currency, but was down slightly against the US dollar at 1.54.
Lloyds Banking Group was the best performing banking stock after it ended uncertainty over its leadership by announcing Antonio Horta-Osorio will return as chief executive on January 9.
Progress on the sale of 632 branches, with the Co-op being chosen as preferred bidder, helped limit the fall in shares to 0.65p at 24.1p.
Fashion group Next held firm after its Spanish rival Inditex, which trades as Zara and Massimo Dutti in the UK, reported 11% sales growth between November 1 and last weekend.
With the figures pointing to resilient demand in the fast-fashion sector, Next shares were higher for much of the session before finishing 5p lower at 2585p.
Retail watchers were also encouraged by the strong performance of Superdry and Cult label owner SuperGroup, although profits of £13m for the half year were down due to recent stock supply issues.
It said it was well placed for the peak Christmas trading period, with its stores business delivering positive like-for-like sales in the last six weeks. Shares recovered some of their recent weakness to close 7% or 36p higher at 538.5p.
Elsewhere in the FTSE 250 Index, Thomas Cook was lower after it revealed more details on a gruesome year for the travel company.
Profits in its troubled UK business fell 68% to £34.1m but management insisted customers were still booking despite recent high-profile difficulties over its £900m debt mountain.
Shares were 0.3p lower at 14.5p.
The only FTSE 100 Index riser was Morrisons, up 0.8p at 316.9p
The biggest FTSE 100 fallers were Fresnillo down 187p at 1494p, Essar Energy off 13.5p at 193.1p, Randgold Resources down 410p at 6360p and Eurasian Natural Resources off 36.5p at 611p.
