Footsie Falls for Fifth Day as Optimism Wears Thin
Byline: MICKEY CLARK
THE optimism that City investors displayed 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.
City investors are becoming 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 UK's 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 70.7 to 4355.4. The broader FTSE 250 was down 182.5 at 6503.4.
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 if you happen to be a housebuilder.
Taylor Wimpey fell 5-p to 193/4p following its latest trading update. Barratt Developments also lost 7-p to 93p, Berkeley Group 32'p to 856p, Bellway 6'p to 612p, and Redrow 33/4p to 161'p.
Tesco rose 6.3p to 356.6p after its Christmas trading update. Brokers said it was in line with expectations, although it was the supermarket giant's worst performance in almost 20 years.
Rival J Sainsbury responded with a rise of a penny to 3163/4p, while Wm Morrison, which reports next week, dipped 33/4p to 2713/4p. The banks bore the brunt of the sell-off among bluechips as they gave back most of yesterday's gains. City opinion says they will have to come back cap-in-hand to the Government later this year for another round of funding.
NCB Stockbrokers says Royal Bank of Scotland, down 5.2p at 49.8p, has a $3.5 billion exposure to the bankrupt Lyondell Chemical, equivalent to 5% of the bank's 2009 forecast net asset value. Barclays also fell 20p at 164. …