Byline: MICKEY CLARK
The optimism that City investors dis-played at the start of the New Year has been blown away, with the London stock market heading for its fifth consecutive day of losses.
A big sell-off overnight in New York spilled over into Asia this morning as worries about the slump in the global economy and the US stimulus package gathered pace. Federal Reserve chair-man Ben Bernanke, speaking today at the London School of Economics, con-fessed he did not know when the eco-nomic recovery would get under way.
Meanwhile, City investors are becom-ing increasingly anxious about our own economy. Their concerns have been heightened by gloomy surveys from the British Chambers of Commerce and the British Retail Consortium, while the UKs trade gap with the rest of the world has widened to [pounds sterling]8.3 billion the biggest deficit since records were started in the 17th century.
The FTSE 100 index responded with a fall of 42.9 to 4383.2. The broader FTSE 250 was down 153.1 at 6532.8. This after-noon, Wall Street lost an early lead despite a narrowing of the US trade deficit. The Dow fell 15.6 to 8458.2.
The Royal Institution of Chartered Surveyors tried to lighten the mood by pointing out that the pace of decline in house prices had slowed in December, but it countered this by pointing out that sales volume had hit a record low. Not good news for the housebuilders.
Taylor Wimpey fell 51/4p to 193/4p fol-lowing its latest trading update. Bar-ratt Developments also lost 41/4p to 96p, Berkeley Group 16p to 8721/2p, Bellway 10p to 6081/2p, and Redrow 31/4p to 162p.
Tesco rose 5.8p to 356.1p after its Christ-mas trading update. Brokers said it was in line with expectations, though it was the supermarket giants worst perform-ance in almost 20 years. Rival J Sains-bury responded with a 1/2p rise to 3151/4p while Wm Morrison, which reports next week, dipped 13/4p to 2733/4p.
The banks bore the brunt of the sell-off among blue-chips as they gave back most of yesterdays gains. …