FTSE closes at 5320.4

Last Modified: 19 Aug 2008
Source: ITN

Fears the global financial crisis could get worse in the coming months saw widespread losses in London as the FTSE 100 Index slumped more than 2 per cent.

Banks and retailers were worst hit as reports of a Government bail-out for mortgage firms Fannie Mae and Freddie Mac and speculation about weaker than expected third-quarter results from Lehman Brothers shook the market.

The FTSE ended the day down 129.8 at 5320.4, with former IMF chief economist, Kenneth Rogoff, adding to the worries by warning that a large US bank could collapse in the next few months.

UK banks had been showing tentative signs of improvement in recent days, but the blow to confidence meant the sector accounted for a large slice of today's losses.

Halifax Bank of Scotland was worst hit, losing more than 7 per cent or 22p to 277.5p. Barclays slipped 18.5p to 324.25p, Royal Bank of Scotland fell 13.5p to 215p and Lloyds TSB eased 17.75p to 288.25p.

Insurers did not escape, with Legal & General falling 7.2p to 95.9p.

Among the consumer-facing stocks worse off were Marks & Spencer, down 16.5p to 255.75p, and Wolseley, which dived nearly 9 per cent, or 36.75p to 389.5p. B&Q owner Kingfisher joined the slide, falling 8.1p to 120.1p.

Property stocks were also lower after warehouse specialist Brixton reported half-year losses and gave an insight into the turmoil facing the market, particularly the current confusion over valuations.

Brixton - a FTSE 250 Index stock - fell 9 per cent or 23p to 224.75p, while in the top flight Hammerson slipped 61p to 862p and British Land eased 45p to 704p.

The weaker sentiment caused by Brixton's results also impacted house builders in the FTSE 250, with Persimmon down 21p to 311p ahead of half-year results later in the week. Barratt Developments was off 7.75p at 121.5p and Taylor Wimpey fell 3.5p to 43.25p.

Newspaper group Trinity Mirror fell 10p to 100.5p and Johnston Press dropped 5.5p to 54.5p, a decline of 10 per cent, as investors dived for cover amid the uncertainty.

The FTSE's four biggest risers were Smith & Nephew up 13.5p to 632p, Xstrata up 52p to 2875p, Wood Group up 4.5p to 405.75p and Scottish & Southern Energy which ended the day 14p stronger at 1453p.

The four biggest fallers were Wolseley down 36.75p to 389.5p, HBOS down 22p to 277.5p, Legal & General down 7.2p to 95.9p and Prudential which closed 37.5p down at 512.5p.

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