FTSE heads south again

Apr 9 2008 by Haydon Wood, Liverpool Daily Post

The London Stock exchange has once again dropped below the all-import 6,000 mark.

The FTSE 100 Index closed down 24.6 points at 5990.2 after data from Halifax Bank of Scotland revealed a 2.5% fall in property prices last month.

The fall – the biggest monthly drop since 1992 hit housebuilders and banks hard, with stocks exposed to the UK consumer also put on the back foot, despite hopes of a cut in interest rates later this week.

Investor nerves were also tested by a stark warning from the International Monetary Fund (IMF) that worldwide losses from the credit crunch could balloon to nearly one trillion US dollars (£508bn).

The Bank of England also announced it would pump an extra £5 billion into crisis-struck money markets in a bid to ease liquidity

But the move was not enough to prevent banks from feeling the pinch, with HBOS leading the sector’s falls, joined on the fallers board by Charles Church housebuilder Persimmon.

The housebuilder felt the pressure most in the property sector with a decline of 3%, or 19p to 687p after more bad news for the UK’s housing market.

The UK’s biggest mortgage lender, Halifax Bank of Scotland, fell 10.5p to 549.5p, while in the retail sector Next dipped 37p to 1195p and Marks & Spencer fell 12.25p at 379.5p, or 3%.

DIY firms – closely linked to the fortunes of the property sector – fared badly as well, with B&Q owner Kingfisher off 3.3p at 130.4p and Homebase owner Home Retail Group slipping 7.75p to 265p, a drop of 3%.

One of the biggest gains of the session came from BT after the telecoms firm announced the earlier-than-expected departure of chief executive Ben Verwaayen, ending a six-year tenure with the group. Analysts welcomed the succession plan however, with shares up 3.5p to 233.25p after BT said retail boss Ian Livingston would take the helm in June.

Elsewhere, a run of gains for British Energy came to an end with a fall of 3p to 710.5p as investors paused for breath after speculation about a joint bid involving British Gas parent Centrica and any one of several European utility firms.

The biggest Footsie risers were BHP Billiton up 77p at 1762p, Xstrata ahead 87p at 3954p, and Unilever up 28p at 1725p.

The biggest Footsie fallers were Sage down 11.4p at 196.6p, Cairn Energy off 149p at 2833p, and British Airways down 8.75p at 231.25p.