Market Report: Footsie takes biggest fall since '87

FOOTSIE TOOK a massive tumble yesterday as a combination of American gloom, profit-taking and bearish economic sentiment conjured up the biggest fall since the crash of 1987. The blue-chip index looked like a well-lubricated City worker at the end of the office Christmas Party, staggering aimlessly for a while before falling flat on its face.

The main index finished a punch-drunk 206.4, or 3.6 per cent, lower at 5537.5, after breaking through the psychologically important 5,700 and 5,600 barriers. The biggest push by far came from Wall Street, which plunged 200 points overnight. Hong Kong and Tokyo also did their bit to corrode confidence and when London opened its fate was sealed.

Profit-taking set in, buoyed by the feeling that the market had been overbought in recent times. A gloomy CBI survey on services gave further ammunition to the sellers and red became the colour of choice among City screens. The mid and small cap fared relatively better but were still nursing big losses. The FTSE 250 closed down 80.3 at 4821.4, while the Small Cap shed 25.5 to 2039.5.

Financials were caught in the eye of the storm as the recent outperformance whetted the profit- takers' appetite. Amvescap took the brunt of some heavy selling. Fears over its exposure to melting global markets took 41.5p off the shares, which closed at 452p.

HSBC suffered from the Hang Seng's weakness and a downgrade from Credit Lyonnais. The final deficit was 104p to 1,536p. Standard Chartered was also on the receiving end of the Hang Seng/ Credit Lyonnais double whammy and crashed 17p to 627p.

The domestic banks fared little better. Royal Bank of Scotland, down 57p to 856p continued its rotten run ahead of tomorrow's results. The market is worried about bad debts. Its neighbour Bank of Scotland fell 39p to 631p in sympathy.

Lloyds TSB, still hot favourite for a takeover of Barclays, lost over 6 per cent to 791p after house broker ABN Amro cut its 1999 profit forecast to pounds 2.9bn from pounds 2.95. Abbey National was also among the banks' casualties, losing 64p to 1,161p.

Only five Footsie members survived the bloodbath. Telewest excited investors with its growth prospects. The shares put on 2p to 133p. Takeover talk kept EMI afloat. The music group rose a harmonious 4.25p to 365.25p. Railtrack, up 17p to 1,680p; Marks & Spencer, up 3.25p to 415.25p; and National Power, up 2.5p to 518.5p, benefited from their traditional role as safe havens.

IT stocks had Wall Street to blame for their underperformance. The techies had led the US market's overnight slump and London dealers embarked on some copycat selling. Sema was the second largest faller in the Footsie, shedding over 9 per cent to 450p. Colt, the Footsie newcomer, also suffered, losing 48.5p to 743.5p.

Among the IT mid-cappers, CMG fell 117p to 1,385. Micro Focus did not help itself. The fast-growing group lost its chief executive and over 6 per cent to close at 117.5p.

Capita Group drove into a corner and triggered a slide in support services stocks. Rumour has it that it has lost the contract to provide would-be drivers with theory tests. The shares crashed over 8 per cent to 521p. Serco, down 70p to 950p, was hit by reflected gloom as the market fretted about margins in the competitive support market. Sector member AEA Technology was also down 8.1 per cent to 735p.

Hazlewood Foods was also guilty of spreading the selling disease. The convenience food producer disgusted analysts with weak interim numbers and was splattered all over the trading floor with a 7 per cent loss to 132.5p. Associated British Foods caught the bug, ending 57.5p down to 555.5p - Footsie's worst performer. The market fears that ABF's trading update on Friday may be difficult to digest.

Rexam wrapped itself into a mess. The paper group fell 13.5p to 182p as the market cast a gloomy eye on Monday's bid for the Swedish packaging group PLM.

The few risers in the mid cap had something odd about them. Lonrho, the mining giant, dug up a 6.4 per cent rise to 322p, but that was the correction of a bargain-price trade (at 302.5p) late on Monday. Similar story for Rank. The leisure group soared 11.5p to 226.5p, putting right a spaghetti- fingered deal the previous day.

Cortecs, one of the biotech strugglers, lost an unhealthy 56.6 per cent to 11.5p after warning of delays to its star products and the demise of its second senior executive in six months. Engineer Turnpyke, down a third to 5p, said tough export markets would slash profits.

Kenwood Appliances, the kettle and chip-frier maker, issued yet another profit warning and saw the shares burn over 15 per cent to 104p.

SEAQ VOLUME: 1.14 billion


GILTS INDEX: 114.27 +0.33

CITY SITE Estates, a small Scottish property group, firmed 4p to 30.5p, after revealing that it had received a takeover approach. The market is betting that the new offer will top the 26p-a-share from City Site's managing director Louis Goodman. Mr Goodman, launched his pounds 4.4m bid to take the company private in November and now controls around 37 per cent of the shares.

MEMORY CORPORATION, unchanged at 25p yesterday, will be active today. The IT stock, listed on AIM, is expected to announce a pounds 3m contract with ICL. Memory, also traded on the European exchange Easdaq, will upgrade and streamline the memories of all ICL-made tills. The computerised equipment has been installed in supermarkets across Europe and Memory's engineers will tour the continent to replace their chips.

Suggested Topics
Mosul dam was retaken with the help of the US
voicesRobert Fisk: Barack Obama is following the jihadists’ script
Arts and Entertainment
Loaded weapon: drugs have surprise side effects for Scarlett Johansson in Luc Besson’s ‘Lucy’
filmReview: Lucy, Luc Besson's complex thriller
peoplePamela Anderson rejects ice bucket challenge because of ALS experiments on animals
Arts and Entertainment
tvExecutive says content is not 'without any purpose'
A cleaner prepares the red carpet for the opening night during the 59th International Cannes Film Festival May 17, 2006 in Cannes, France.
newsPowerful vacuum cleaners to be banned under EU regulations
sportLeague Managers' Association had described Malky Mackay texts as 'friendly banter'
A polar bear’s diet is rich in seal blubber and half of its own body weight is composed of fat
peopleCareer spanned 70 years, including work with Holocaust survivors
ebooksAn evocation of the conflict through the eyes of those who lived through it
Flocking round: Beyoncé, Madame Tussauds' latest waxwork, looking fierce in the park
travelIn a digital age when we have more access than ever to the stars, why are waxworks still pulling in crowds?
London is the most expensive city in Europe for cultural activities such as ballet
Arts and Entertainment
Jeremy Clarkson has rejected criticisms of his language, according to BBC director of television Danny Cohen
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Application Support - Enterprise Java, SQL, Oracle, SQL Server

£45000 - £55000 per annum: Harrington Starr: A well-established financial soft...

Service Desk Analyst (Graduate, Helpdesk, Desktop, Surrey)

Negotiable: Harrington Starr: Service Desk Analyst (Graduate, Helpdesk, Deskto...

Service Desk Analyst (Graduate, Helpdesk, Desktop, Surrey)

Negotiable: Harrington Starr: Service Desk Analyst (Graduate, Helpdesk, Deskto...

Junior Quant Analyst - C++, Boost, Data Mining

£25000 - £35000 per annum: Harrington Starr: Junior Quant Analyst - C++, Boost...

Day In a Page

Air strikes? Talk of God? Obama is following the jihadists’ script

Air strikes? Talk of God? Obama is following the jihadists’ script

The President came the nearest he has come yet to rivalling George W Bush’s gormless reaction to 9/11 , says Robert Fisk
Ebola outbreak: Billy Graham’s son declares righteous war on the virus

Billy Graham’s son declares righteous war on Ebola

A Christian charity’s efforts to save missionaries trapped in Africa by the crisis have been justifiably praised. But doubts remain about its evangelical motives
Jeremy Clarkson 'does not see a problem' with his racist language on Top Gear, says BBC

Not even Jeremy Clarkson is bigger than the BBC, says TV boss

Corporation’s head of television confirms ‘Top Gear’ host was warned about racist language
Nick Clegg the movie: Channel 4 to air Coalition drama showing Lib Dem leader's rise

Nick Clegg the movie

Channel 4 to air Coalition drama showing Lib Dem leader's rise
Philip Larkin: Misogynist, racist, miserable? Or caring, playful man who lived for others?

Philip Larkin: What will survive of him?

Larkin's reputation has taken a knocking. But a new book by James Booth argues that the poet was affectionate, witty, entertaining and kind, as hitherto unseen letters, sketches and 'selfies' reveal
Madame Tussauds has shown off its Beyoncé waxwork in Regent's Park - but why is the tourist attraction still pulling in the crowds?

Waxing lyrical

Madame Tussauds has shown off its Beyoncé waxwork in Regent's Park - but why is the tourist attraction still pulling in the crowds?
Texas forensic astronomer finally pinpoints the exact birth of impressionism

Revealed (to the minute)

The precise time when impressionism was born
From slow-roasted to sugar-cured: how to make the most of the British tomato season

Make the most of British tomatoes

The British crop is at its tastiest and most abundant. Sudi Pigott shares her favourite recipes
10 best men's skincare products

Face it: 10 best men's skincare products

Oscar Quine cleanses, tones and moisturises to find skin-savers blokes will be proud to display on the bathroom shelf
Malky Mackay allegations: Malky Mackay, Iain Moody and another grim day for English football

Mackay, Moody and another grim day for English football

The latest shocking claims do nothing to dispel the image that some in the game on these shores exist in a time warp, laments Sam Wallace
La Liga analysis: Will Barcelona's hopes go out of the window?

Will Barcelona's hopes go out of the window?

Pete Jenson starts his preview of the Spanish season, which begins on Saturday, by explaining how Fifa’s transfer ban will affect the Catalans
Middle East crisis: We know all too much about the cruelty of Isis – but all too little about who they are

We know all too much about the cruelty of Isis – but all too little about who they are

Now Obama has seen the next US reporter to be threatened with beheading, will he blink, asks Robert Fisk
Neanderthals lived alongside humans for centuries, latest study shows

Final resting place of our Neanderthal neighbours revealed

Bones dated to 40,000 years ago show species may have died out in Belgium species co-existed
Scottish independence: The new Scots who hold fate of the UK in their hands

The new Scots who hold fate of the UK in their hands

Scotland’s immigrants are as passionate about the future of their adopted nation as anyone else
Britain's ugliest buildings: Which monstrosities should be nominated for the Dead Prize?

Blight club: Britain's ugliest buildings

Following the architect Cameron Sinclair's introduction of the Dead Prize, an award for ugly buildings, John Rentoul reflects on some of the biggest blots on the UK landscape