Financial and mining stocks under pressure as Footsie extends losses

FTSE: 5,598.23 (–97.05) Mid-250: 11,033.11 (–118.12) Small Cap: 3,110.70 (–2.25):UK STOCKS dropped for a sixth day yesterday led by a sell-off in financial and basic resource companies as Japan battles to prevent a nuclear meltdown.

The FTSE 100 Index retreated 1.7 per cent to 5,598.23 at the close in London, extending yesterday’s 1.4 per cent drop.

The FTSE All-Share Index slid 1.6 per cent yesterday.

“With so much uncertainty about whether the nuclear fallout can be contained, no one wants to get back into equities until there’s a cast-iron all-clear from the Japanese government,” said London-based Angus Campbell, head of sales at Capital Spreads.

The benchmark FTSE 100 has tumbled 8.1 per cent from this year’s high as political turmoil in the Middle East sent oil prices surging and Japan battled to stop earthquake-damaged nuclear reactors from leaking radiation.

Tokyo Electric Power said a reactor containment vessel may have been breached at the Fukushima Dai-Ichi power plant, deepening the crisis in the world’s third-largest economy and increasing the risks of radioactive leaks.

Barclays led financial shares lower falling 3.4 per cent to 282p. Prudential slid 3.1 per cent to 673.5p while asset manager Schroders declined 2.3 per cent to 1,691p.

HSBC, Europe’s largest bank and biggest weighted stock on the FTSE 100 Index, fell 2.5 per cent to 622.5p as the shares trade without the right to the latest interim dividend.

Manic Miners Anglo American the world’s fourth-largest diversified mining company fell 2.5 per cent to 2,954.5p.

Xstrata a copper producer slid 1.4 per cent to 1,329p and BHP Billiton the world’s biggest mining company declined 1.6 per cent to 2,213p.

IAG led airlines lower. The parent company of British Airways retreated 3.5 per cent to 212.9p, EasyJet fell 1.5 per cent to 333.4p. Irish Life and Permanent slumped 10 per cent to 60 cents in Dublin trading, extending yesterday’s 14 per cent sell-off.

Associated British Foods rose 1 per cent to 949.5p, one of nine companies to gain on the FTSE 100.

3i rallied 2.2 per cent to 291p after chief executive officer Michael Queen bought 100,000 shares in Europe’s largest publicly traded private equity firm. – (Bloomberg)