Traders ran for cover from the fallout of continuing worries about emerging markets, and the FTSE 100 fell for the fourth day, to 6,550.66 – losing 113.08 points, or 1.7 per cent.
Currency problems that emerged in the past week in places as far afield as Argentina, Turkey, Brazil and Russia remained an issue, while sharp falls in market heavyweights Vodafone and BG also weighed on blue chips.
News that a bid for Vodafone will not emerge imminently led investors to hang up their shares in the telecom giant. After months of speculation, its US rival AT&T was forced to admit it does not intend to make an offer and Vodafone lost 9p to 223.55p.
AT&T’s move – which rules out a bid for Vodafone for at least six months unless a rival one emerges – follows reports that Randall Stephenson, the company’s chief executive and chairman, had discussed a potential deal with Neelie Kroes, the EU’s Digital Agenda Commissioner, at Davos last week.
It wasn’t the worst faller of the day, however. BG, the oil and gas group, collapsed 173p to 1,082p after it issued its fourth profits warning in less than 18 months.
Investors flowed out of riskier stocks into the water companies United Utilities and Severn Trent, regarded as defensives. United Utilities, which is due to provide a trading update this week, jetted 13p to 713.5p and Severn Trent rose 22p to 1,700p – despite an update from the regulator Ofwat yesterday demanding that companies accept lower rates of return across the sector. Both stocks were also the subject of re-heated bid speculation.
Stockbroker Hargreaves Lansdown was out of favour after a number of rivals undercut its fees and it lost 80p to 1,429p.
Colefax, the AIM-listed furnishing, fabrics and wallpaper designer, surged 52.5p to 405p as it revealed a £4.4m buyback at the same time as announcing a 15 per cent rise in sales for the half year.
Daily Internet, the internet hosting and cloud infrastructure provider, fell 0.25p to 1.75p as it raised £625,000 via a placing at 1.65p and used £150,000 of it to buy the internet domain name registrar NameHog.