UK NEWS
AMERICA'S CHEER OVER RECESSION END PROVES SHORT LIVED
By Express.co.uk Reporter
PERSISTENT fears over the US economy sparked a sell-off on world stock markets today as yesterday’s cheer over the end of America’s recession proved short lived.
London’s FTSE 100 Index plunged 93.2 points to 5044.6 - its lowest close for a month - while the Dow Jones Industrial Average on Wall Street fell more than 220 points in early trade.
European indices also suffered, with the Cac 40 in France and Germany’s Dax both off 3%.
Poor US consumer spending figures tempered enthusiasm from the previous session after better-than-expected gross domestic product data had led stocks higher.
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Today’s US data showed that consumer spending plunged in September by
the largest amount in nine months, down 0.5%, while a drop in the mood
of US consumers was also discouraging.
The Reuters/University of Michigan consumer sentiment index fell to 70.6 in October from 73.5 in September.
Metal prices dropped amid the recovery doubts, sending heavily-weighted
miners deep into the red and dragging the wider Footsie down too.
Kazakhmys fell by 8%, or 97p to 1089p, with miners accounting for all of the top five fallers.
Among other commodity stocks, oil giants BP and Royal Dutch Shell were
down 14.2p to 572.3p and 53p to 1760p respectively. The pair came under
pressure as investors continued to digest third-quarter profit figures
this week which showed the impact of lower oil prices.
Finance firms were likewise hit in the shares fall, with insurer
Prudential down 21p at 556.5p and Royal Bank of Scotland among the
worst impacted of the banks, down 1.45p at 41.92p.
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Lloyds Banking Group was able to escape the rout as it continued to
benefit from yesterday’s assurances over plans to avoid the
Government’s asset protection scheme and its restructuring talks with
Europe.
It rose another 1% today, up 1.03p at 87.03p despite reports that it
will have to fork out £2.5 billion in fees to the Government to
withdraw from the asset insurance scheme.
The bank also gained from a Credit Suisse upgrade.
Man Group made modest gains, up 2p at 310p, after heavy falls earlier in the week.
Advertising and media giant WPP followed close behind, adding 3.5p to
548.5p as investors cheered the firm’s forecast of a “marked
improvement” in second-half profits.
In the second tier, struggling transport firm National Express added 1%
or 4p to 325p after its biggest shareholder attacked it for dismissing
a merger with rival Stagecoach too quickly. Traders hoped the public
spat may push the firm into reconsidering a deal.
Elsewhere rail and plant firm Jarvis was down 1.5p to 15.25p or 9%
after it said “extremely preliminary” talks over a possible offer had
come to an end.
The biggest Footsie risers were Shire up 48p at 1072p, G4S ahead 5.4p
at 253p, TUI Travel up 3.1p at 233.1p and Land Securities up 8p at 662p.
The biggest Footsie fallers were Kazakhmys down 97p at 1089p, Fresnillo
off 60.6p to 741.5p, Xstrata down 64.5p at 882.5p and Lonmin off 101p
at 1463p.
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