FTSE FALLS TO TWO-MONTH LOW
By Geoff Marsh for express.co.uk
THE London market tumbled to its lowest close for more than two months today as investors’ faith in a fast-paced recovery wavered.
Commodities stocks were dragged lower amid worries that recent sightings of “green shoots” could have been exaggerated, with miners and petrochemical firms on the back foot.
The FTSE 100 Index closed down 41.4 points at 4194.9 - its lowest level since the end of April.
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Falls in London were echoed in Wall Street, which declined after the long Independence Day holiday weekend, although both
markets recovered some ground amid better than expected figures on the US service sector.
The Dow Jones Industrial Average pared its slump to 0.4% in early trade after a report on services industry activity showed its best result in nine months for June.
But confidence was suppressed as oil hovered around 64 dollars a barrel, pushed lower by concerns that the US economy would not be strong enough to boost demand. Last week, oil hit an eight-month high above 73 dollars.
Commodities stocks continued to be affected by the gloom, which was also spurred by last week’s poor jobs figures in the US and Europe.
Miners occupied the top four spots on the fallers board. Lonmin was the worst affected - down 8% or 99p at 1060p - Xstrata was off 48.8p at 606p, Rio Tinto fell 141p to 1885p and Kazakhmys fell 38.5p to 591.5p.
Shell and BP were also off, down 35p to 1466p and 12.55p to 466.7p respectively.
Investors turned their attention to defensive stocks such as tobacco and telecoms firms.
Vodafone rose 1.95p to 115.65p while BT, which has offered employees the chance of long-term holidays in return for pay cuts, added 1.3p to 103.4p.
Benson & Hedges maker Imperial Tobacco was 23p better off at 1603p. Rival British American Tobacco - which makes Lucky Strikes - was up 30p to 1740p.
In the second tier, an expected flurry of updates from housebuilders over the week ahead put the spotlight firmly on the sector.
With expectations for the major players to confirm more encouraging signs on demand and prices, shares moved higher, led by Bovis Homes up 13.25p to 389.75p and Bellway 16p stronger at 627p.
They were joined on the way up by easyJet after analysts said the low-cost airline’s latest passenger figures showed steady trading. Shares were nearly 3% or 7.25p higher at 273.75p.
But elsewhere, retail chain JJB Sports plunged around 25%, or 7.75p to 23p, after weekend confirmation that it is considering tapping shareholders for cash.
The firm is also at the centre of controversy after it emerged boss Sir David Jones borrowed £1.5 million from Mike Ashley, the billionaire behind rival Sports Direct.
The biggest Footsie risers were Reckitt Benckiser up 70p at 2852p, Rexam up 5.25p at 291.5p, Cadbury up 9.5p at 533p and British American Tobacco up 30p at 1740p.
The biggest Footsie fallers were Lonmin down 99p at 1060p, Xstrata off 48.8p at 606p, Rio Tinto down 141p at 1885p and Kazakhmys down 38.5p at 591.5p.
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