FTSE 100 drops 1.5%
FTSE 100 drops 1.5%
Wednesday 12th November 2008
The FTSE 100 fell 1.5 per cent as early tentative optimism was lost by falls in New York.At close the London index dropped 64.67 points to 4,182.02.
In New York after yesterday's 1.99 per cent fall, the Dow Jones Industrial Average slipped a further 3.15 per cent at 12:08 EST (17:09 GMT).
Gloom also descended on the continent with the Cac 40 slipping 3.07 per cent and the Dax falling 2.96 per cent.
David Jones, chief market strategist at IG Index, explained London was especially hit following a rise in unemployment and the Bank of England's Inflation Report painting a gloomy picture of a recession lasting through 2009 and interest rates and inflation dropping.
"The Bank has turned more pessimistic since August's update - which is no great surprise - but this, coupled with unemployment rising to an 11 year high, was never going to do anything for market sentiment which we all know has been fragile at best in recent weeks," he said.
"While we all still expect an ongoing steady stream of gloomy economic news in the months to come, the question for investors is still how much of this has already been factored in by markets?"
He added: "The UK index is once again starting to peek over the edge of the abyss, with some traders expecting a move sub-4000 once again sooner rather than later.
"The direction in the short term is arguably not too important – it is more about the reaction of investors to this weakness. If the market holds above the lows seen earlier in October it does suggest that despite the continuing dire outlook, stock markets may be signalling the worst has now been seen for share prices."
The biggest gain of the day went to Scottish & Southern Energy, raising 6.29 per cent despite recording a 50 per cent drop in profits.
Vodafone continued its good performance gaining 6.09 per cent, while Shire was up 4.97 per cent, Thomson Reuters rose 4.55 per cent and Admiral Group climbed 4.23 per cent.
Man Group led the drop today – falling 23.39 per cent – after Citigroup lowered its recommendation on the hedge fund.
Prudential dropped 12.43 per cent, miner Kazakhmys fell 10.00 per cent, Thomas Cook slipped 9.99 per cent and Autonomy sank 9.49 per cent.
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