FTSE 100 down as pound drops to five month low

Monday 21st September 2009

The FTSE 100 fell to 5,134.36 – a drop of 38.53 points or 0.74 per cent – at the end of Monday.

The index dropped sharply in early trading, at one point down 1.2 per cent, matched in New York as the Dowa also fell heavily on opening.

However, a resurgence in New York was matched in London, leading the gap to be made up.

At 11:32 EDT (16:32 BST), the Dow was at 9,792.61 – a fall of 0.28 per cent – rebounding from 9732.98 earlier in the day.

David Jones, chief market strategist at IG Index, said: "It's the first fall in the UK's blue-chip index since September 10, when the index slipped below 5000.

"After recent gains, markets have suffered an inevitable pull-back today as investors book profits and take a step back to re-evaluate the economic landscape."

Leading the drops in London for much of the day was Royal Bank of Scotland.

Reports of a rights issue to avoid heavy exposure to the government's asset protection scheme were taken with caution.

RBS ended the day down 5.15 per cent to 53.40p.

Builders merchant Wolseley lost 3.97 per cent, silver miner Fresnillo dropped 3.64 per cent, Xstrata slid 3.63 per cent and Vedanta was down 3.48 per cent.

Leading the gains, Marks & Spencer rose 1.60 per cent ahead of sales figures next week.

Scottish & Southern Energy rose 1.21 per cent, TUI Travel rose 1.20 per cent and Smith & Nephew rose 1.16 per cent.

The big story of the day was sterling which headed further southward – to a five-month low against the euro.

The pound fell 0.40 per cent against the dollar to $1.6206 and 0.22 per cent against the euro to €1.1038 – making $1 worth £0.6169 and €1 worth £0.9060.

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