BRITAIN’S top share index extended losses into a third session yesterday, notching up its biggest weekly fall in six months on the back of global growth concerns and breaking through a key technical support level.
Prospects for future demand from the United States – a key market for UK’s export-focused blue chips – remained in doubt as America’s political battle to avoid the “fiscal cliff” of some $600 billion (£380bn) in potentially crippling tax hikes and spending cuts continued. Some traders were also cutting exposure to risk in case tensions in the Middle East escalate. Michael Hewson at CMC Markets, said: “It’s been another day of caution and uncertainty at the end of a difficult week.”
The benchmark FTSE 100 Index closed about 1.3 per cent or 72.2 points lower at 5,605.6, and there were similar falls in Europe with the Dax in Germany down by just over 1.3 per cent.
The UK fallers’ board was led by Melrose, a business which acquires firms in the engineering sector with the intention of improving their performance. Although it reported that trading had been in line with City expectations this year, Melrose spooked investors by noting slower trends for certain businesses in the last few weeks, prompting a share slump of more than 11 per cent. The stock was off 27.1p to 208.9p.
There was also a fall for water and waste group Pennon after its profits warning on Thursday afternoon. The South West Water owner said waste disposal arm Viridor’s annual profits were set to be “somewhat below” current market forecasts as it admitted a second-half bounce in prices was now looking unlikely.
NEW YORK: Hope that U.S. politicians would find common ground to steer clear of the “fiscal cliff” boosted stocks last night, though the gains were not enough to offset the week’s losses.