FTSE at two-week low over poor data
BRITAIN’S top share index was left nursing heavy losses yesterday after service sector data from China, the Eurozone and the UK intensified concerns the global economy is facing another recession.
The FTSE 100 index ended down 189.45 points, or 3.6 per cent, at 5,102.58, its lowest close since 22 August, as global growth in services came almost to a standstill last month.
Volume was 85 per cent of the 90-day daily average and relatively light compared with Germany’s DAX and France’s CAC 40. There was no chance of a fillip from US markets, closed for the Labor Day public holiday.
Commodity-related stocks fell sharply as investors, still jittery after data on Friday showed US jobs growth flatlined in August, were met by a survey revealing China’s service sector grew in August at the weakest pace on record.
Xstrata led miners lower, down six perc ent, while BG Group was worst off among integrated oil stocks, off 5.2 per cent, as investors fretted about the prospect of lower demand for metals and fuel.
“Everyone’s on tenterhooks to see what happens tomorrow because, with Wall Street closed, we’re not really likely to have that much feedback,” Martin Dobson, head of trading at Westhouse Securities, said.
Banks also exerted significant downward pressure on the index after a US regulator sued 17 large banks and financial institutions on Friday over losses on about $200bn of subprime bonds.
Royal Bank of Scotland was the standout faller, down 12.3 per cent, while Lloyds Banking Group and Barclays shed 7.5 per cent and 6.7 per cent respectively.
Randgold Resources was the sole riser, up one per cent, continuing its bounce after a poor production update and as investors bought the gold miner as a proxy for gold.