FTSE shares see heavy dips
London shares were heading for their heaviest fall in more than a month today after world markets came under heavy pressure overnight.
Evidence that inflationary pressures remained benign in the UK could not spark a fightback as the FTSE 100 Index retreated 76.0 points to stand at 4422.4 by mid-morning.
Analysts said official data showing a rise in producer prices should not cause too much concern as it reflected recent oil price hikes and costs were not being passed on to the consumer.
The tone for a downbeat session had instead been set by surging US jobs growth in April which fuelled fears that the Federal Reserve will hike US rates sooner rather than later.
Investors were braced for a repeat of Friday’s dire session on Wall Street with the Dow Jones Industrial Average tipped to open 120 points lower.
A major fall in Tokyo had added to nerves with the Nikkei closing 554 points lower – the first time it has fallen below the 11,000 level since February.
Only three companies were resisting the sell-off in London and included the traditional “safe stocks” in the tobacco industry. Gallaher was ahead 2p at 669.5p and Imperial Tobacco cheered 8p to 1240p.
Investment group 3i had made early progress but soon slipped back 7p to 595p as speculation cooled that it was being circled by potential buyers.
Mobile phone group mm02 was retreating the fastest as it lost 5% or 4.75p to 93.5p, with British Airways continuing to struggle – off 9.25p at 258p.
Marks & Spencer fell 1% or 2.25p to 274.75p after the clothing retailer announced that chairman Luc Vandevelde was leaving.
Outside the top flight, online travel agency ebookers weakened 6.25p to 278.75p after posting profits of £1.3m (€1.9m) for the first quarter and providing details of a cost-cutting drive.
It was joined on the way down by media group Chrysalis which was 4.25p cheaper at 199.75p – despite posting interim profits ahead of expectations and growing radio revenues by 20% since March.
