Market Report: Brows across the City are furrowed with worry

 

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The Independent Online

Early in the year traders were only listening to good news, sending markets close to record highs. Now the mood is decidedly different, with brows across the City furrowed with worry.

As the price of oil touched a four-year low yesterday, the FTSE 100 continued to fall, down 91.88 points at 6,339.97 – a fresh 12-month low. It caps a dire week for the index, which stands 187.94 points below last Friday’s close.

“There is an air of despondency from investors as they simply can’t find any positive news to cling on to at the moment,” said Interactive Investor’s Mike McCudden. “From the US removing the steroids which have propped up the markets to the eurozone continuing on its downward spiral, there really is no urgency to go bargain-hunting at current levels.”

Tullow Oil was one of the worst performers, down 45p at 526p, after its Sputnik-1 well off Gabon failed to find commercially viable reserves of oil.

Microchip designers were sent sliding after a profit warning from the US goliath Microchip Technology. The Arizona company warned of a slowdown in China, with Credit Suisse cautioning that Microchip is usually “an extremely good industry barometer”. Arm Holdings slipped 30p to 842.5p and Imagination Technologies 5.5p to 172p but the worst hit was CSR, down 45.5p at 671p. Microchip has been considering a takeover of the Bluetooth pioneer, with next Wednesday the deadline for an offer. A deal looks increasingly unlikely.

On the mid-cap index, Telecom Plus managed to carve out an 86p gain to 1,342p as it revealed it signed up 35,000 customers in the first half of the year. The phone and broadband provider has branched out to become a challenger energy provider, to its benefit.

Plastics specialist Carclo tumbled 17.5p to 95.5p after announcing a review of its CIT business. It warned that the review could lead to a “significant writedown”.

The saga of London Mining continued yesterday, with the shares suspended in late afternoon trade over concerns about its finances. Before the freeze London Mining was up 2.96p at 4.7p amid reports that India’s JSW Steel is close to a deal to buy the company.

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