RTRS: FTSE slides to 3-month low, investors rattled
Growing anxiety about the state of the financial sector and deepening gloom on the global economy sent banks and miners skidding lower on Friday, dragging Britain's top share index down to its lowest in three months.
By 0912 GMT, the FTSE 100 .FTSE was down 79.60 points at 3,938.77 after rising 0.3 percent the previous session. It earlier hit its lowest level since November 24 and is down 11.4 percent this year after falling more than 31 percent in 2008.
Intensifying concerns about the ailing global economy hurt the demand outlook, weighing heavily on heavyweight miners and energy stocks.
BP (BP.L), Royal Dutch Shell (RDSa.L) and Cairn Energy (CNE.L) fell between 0.4 and 2.3 percent while Xstrata (XTA.L), Rio Tinto (RIO.L) and Kazakhmys (KAZ.L) lost 0.7 to 2.7 percent.
Anglo American (AAL.L) was the heaviest blue-chip loser, off 12.5 percent after it scrapped its 2008 dividend and said it will cut 19,000 jobs.
"We're going through one of those phases where the market corrects itself. No sooner does the European market decide where it wants to be than the U.S. and Asian markets fall," said Peter Dixon, UK economist at Commerzbank
In New York, the Dow Jones Industrial Average .DJI ended at a more than six-year low on Thursday, while Japan's Topix fell to its lowest level in 25 years as risk aversion gripped nervous investors globally.
"The market is falling because it is getting in tune with reality. It's a reflection of the deterioration in the global economy and the impact that will have on earnings, which is why this downturn has some way to go," Dixon said. Banks were also among the heaviest fallers as investors fretted once again about the threat of nationalisation that the sector faces.
Royal Bank of Scotland (RBS.L) fell 6.9 percent, while HSBC (HSBA.L), Lloyds Banking Group (LLOY.L) and Standard Chartered (STAN.L) fell between 2.1 and 3.7 percent.
Investors will examine the latest UK retail sales numbers, due at 0930 GMT, for more signs of distress in the domestic economy, while this afternoon attention will be on U.S. consumer price data.
In his final speech before stepping down, Sir John Gieve, the Bank of England's deputy governor, said the government should consider imposing caps on the amount mortgage companies can lend to homebuyers, The Daily Telegraph said.
