LEADING SHARES fell sharply, hit by surprisingly strong US data and disappointing results from two of the market's biggest companies. The FTSE 100 closed down 179.7 points or 2.9 per cent at 6,117.5 - a four- month closing low. The blue chip index was knocked from the outset as Glaxo Wellcome said it would miss its double-digit sales and earnings growth targets, and BT reported higher than expected costs. But the slide gathered pace amid fresh fears of a US rate rise.
Market Report, page 19
STOCKS TUMBLED as Wall Street ignored strong earnings from several major companies and focused on a higher than anticipated employment cost index, a leading inflation gauge. By midday, the Dow Jones was off 162 points, or 1.49 per cent, at 10,808, having at one point fallen 200 points. The employment cost index rose 1.1 per cent in the second quarter against a forecast of 0.8 per cent. GDP rose at a slower than expected 2.3 per cent.
THE JAPANESE stock market rose on the back of a surge in hi-tech stocks and strong industrial output data. The benchmark Nikkei-225 index ended up 290.01 or 1.65 per cent at 17,869.92, having at one point being 2 per cent ahead. Industrial production rose 3 per cent in June against a forecast of 1.7 per cent. "The June figure was stronger than expected," said one trader. The hi-tech sector surged after Morgan Stanley upgraded its investment rating on Sony and Fujitsu to "strong buy".
HARSH CRITICISM by the International Monetary Fund and growing concern about the rouble's stability knocked sent Russian stocks plunging. The benchmark RTS1-Interfax index finished down sharply, shedding 7.37 per cent to close at 114.54. IMF said that it "had been lied to" by the authorities over how an earlier $4.8bn payment had been used. Said one trader: "I think a lot of investors decided to take profits now while they still have the chance."
WEAKER THAN EXPECTED results from three of Germany's biggest blue chips sent the stock market tumbling. The Dax index plunged 3.39 per cent to 5,052, with the misery compounded by rate fears on sharper than expected United States wage costs. DaimlerChrysler, Commerzbank and Deutsche Telekom fell 5.6 per cent, 1.9 per cent and 1.6 per cent respectively on profits figures. Technical analysts clashed over whether the index would fall as low as 5,000 or 4,600 points.Reuse content