Afternoon dive for FTSE sees index moving to 5,100
Fears about the global economic recovery weight heavily on investor sentiment today, appearing in the form of a solid drop in the morning and another dive by 13:00 BST. By 13:35 the FTSE 100 index stood at 5,143, down by 1.75 per cent from yesterday's close.
Chris Bradshaw
shareprices.com - Tuesday, August 24, 2010
On the down side were the usual suspects – mining and banking stocks. By mid-afternoon Vedanta Resources showed a substantial decline of 7.85 per cent. Other miners including Kazakhmys, Xstrata, Eurasian Natural Resource and Rio Tinto all lost between 5.3 and 3.7 per cent.
Vedanta Resources faced investor scorn as India's environment ministry rejected a plan presented by Vedanta to mine bauxite in the east of India. The environment ministry said that the plan violates forestry laws. Vedanta received additional bad news as it is facing regulatory hurdles in its bid for Cairn India.
Banks are faring no better, with Royal Bank of Scotland Group down 3.3 per cent, Barclays down 3.2 per cent and Lloyds Banking Group down 3.1 per cent.
Today showed few winners. Defensive stocks are leaning to the positive side as WM Morrison Supermarkets traded flat and British American Tobacco traded up by 0.5 per cent.
However bucking the trend this morning is Associated British Foods. The stock gained 3.8 per cent in morning trading.
Martin Weale, a new Bank of England policy maker suggested that the UK central bank's growth forecast for this year may be too optimistic and that Britain faces the risk of falling into a double dip recession.
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