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FTSE closes sharply lower

END-OF-DAY REPORT: Headline shares added to losses late in the session, as Wall Street traded sharply lower after disappointing employment data. In London, weak heavyweight miners, oil majors and banking issues led the wider market lower.

At the close of play, the FTSE100 was down 121.4 points at 5,240.7 with the FTSE250 off 183.2 points at 8,966.8 and the FTSE Smallcaps 37 points weaker at 2,813.4.

NEW YORK

US stocks opened lower after government data showed the US labor market deteriorated further in August, pushing the unemployment rate to its highest level in nearly five years.

At the London close, the DJIA was down 76.86 points at 11,111.37, the S&P500 was off 13.01 points at 1,223.82 and the Nasdaq Composite fell 29.27 points to 2,229.77.

Crude oil traded down $2.15 to $105.74 a barrel, after closing on Thursday at the lowest level since April 4th.

LONDON MARKETS

The mining sector was hit by falling metals prices and news that copper had dropped to the lowest level in seven months. A sharp rise in the dollar exacerbated the situation.

Rio Tinto fell 156p to 4,315p, BHP Billiton slipped 48p to 1,438p, Xstrata was off 146p at 2,465p and Anglo American dropped 126p to 2,304p.

The banking sector remained under pressure thoughout the session, on ongoing global credit concerns.

Barclays was down 12p at 317.25p, HBOS 7p weaker at 275.5p, Lloyds TSB off 7.25p at 279p and Royal Bank of Scotland 8p lower at 219.75p.

The oil majors slumped when crude oil futures slipped below $106 a barrel in New York as
US consumption eased.

BP lost 6.25p at 499.25p, BG Group was 22p weaker at 1,033p and Shell drifted 59p lower at 1,681p.

RSA insurance was strong, up 4.5p at 162.8p as rumours of a bid from Allianz gathered momentum. Both RSA and Allianz declined to comment.

Cadbury was the biggest blue chip winner of the day, up 14p to 636p, as market chatter suggested the confectionery group as appointed one of its global advisers, UBS, to sell off its Australian drinks business with analysts valuing the unit at around £600m.

The UK business press highlighted how the operators of exchanges rivalling the LSE have made a ‘symbolic point’ of trading heavily in the LSE’s own shares, causing the market share of trading in LSE shares to drop to around 61.2% yesterday, 27.5% on the CHI-x and 11.3% on Turquoise. LSE shares fell a further 10p to 758.5p.

Telecoms stocks suffered heavy losses after Nokia, the world's biggest handset maker, warned that the mobile phone market and its own market share will be weaker than previously expected.

Vodafone slid 6.2p to 131.7, Cable & Wireless dipped 7.5p to 166.5p and Carphone Warehouse lost 2.7p at 191.5, while handset chipmaker ARM Holdings fell 4.5p at 106.5p and Wolfson Microelectronics was down 5p at 118.5p.

New Star Asset Management fell 0.5p to 103.25p after HSBC cut its price target to 110p from 130p, but kept its 'neutral' recommendation after the company released its first-half figures on August 29th.

HSBC described in a note that the results and the fund manager's outlook 'bad', after New Star reported a 70% fall in pretax profits and announced that it was cutting its dividend to 1p from 4p.

Pubs operator JD Wetherspoon, which has nearly 700 pubs in the UK, this morning reported an 11% tumble in full-year pretax profit. The group made an adjusted pretax profit of £55m in the year to July 27th, in line with the consensus forecast. Wetherspoon shares rose 7.5p to 268.5p, but Enterprise Inns was down 7.5p at 271.75p, continuing its' journey south.

Bus and rail operator Go-Ahead Group, down 49p at 1,901p, said this morning its trading since June 28th had been in line with expectations, and its outlook was positive, despite economic uncertainty, with revenue 20% higher and pretax profit up 19%.

In a statement published ahead of the group's annual shareholders' meeting, HMV Group, the music, DVD, computer games and books retailer, said underlying sales had continued to grow, but at a slower rate, broadly in-line with expectations. HMV shares were off 3p at 128.75p.

Carr's Milling Industries bucked the downward trend after it said it expects its full-year pretax profit to more than double to at least £12.5m on revenue of about £350m, after 'very strong trading' across all divisions and geographies. The shares added 15p at 677.5p.

Story supplied by MoneyAM

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