MARKET REPORT: £28bn shares sell-off from top British companies
LEADING UK shares were in freefall yesterday as the European Central Bank failed to convince investors its actions would kickstart the faltering eurozone economy.
ECB president Mario Draghi’s announcement that it would start buying covered bonds and asset-backed securities underwhelmed some dealers, who believe a more powerful quantitative easing stimulus is required.
The FTSE 100 Index plunged 111.13 points to 6446.39 – its lowest since last December – wiping over £28billion from the value of Britain’s top companies. However, its 1.69 per cent reverse paled in comparison with a near 4 per cent reverse for the Italian market, while leading French and Spanish shares dropped 2.8 per cent and 3.1 per cent.
Only three of the top 100 companies made gains. Precious metals producers Fresnillo and Randgold Resources firmed 2½p to 749½p and 1p to 4155p as investors bought safe haven gold. Financial services group Hargreaves Lansdown added 4p to 933p.
The FTSE 100 Index plunged 111.13 points to 6446.39 – its lowest since last December
Sliding crude prices hit blue chip explorers Tullow Oil and BG Group, down 21½p to 609½p and 39½p to 1053½p, while BP lost 12¾p to 440p. The top flight’s biggest casualty was equipment rental company Ashtead Group, off 47p to 977p, whose impressive recent run was halted by a surprise fall in US construction spending in August.
Worries over slowing demand from big metals consumer China took the shine off miners such as Anglo American and BHP Billiton, down 36½p to 1327p, and 23½p to 1667p.
The heavyweight banking sector also provided some of the big losers, with Barclays and Royal Bank of Scotland overdrawn 6½p to 220¾p and 9¾p to 358¾p.
Even retail tycoon Mike Ashley seems to have lost his Midas touch as shares in his Sports Direct sportswear business were marked down 17½p to a 15-month low 595p.
Construction and support services group Carillion built a 4¾p rise to 309p following a reassuring trading update, while Eastern Europe-focused vodka group Stock Spirits strengthened 2p to 296p as Oriel Securities told clients to buy with a 350p target. Hikma Pharmaceuticals improved 12p to 1727p on the back of bullish comments from JPMorgan Cazenove amid speculation it is considering a £600million-plus bid for US business CorePharma.
On Wall Street, the Dow Jones closed down 3.66 points at 16801.05 by the end of trading.
