Concerns are growing again about economic growth prospects in the UK and the FTSE 100 has reacted in...
Concerns are growing again about economic growth prospects in the UK and the FTSE 100 has reacted in the usual manner, to push the index towards its worst-ever January.
National Institute of Economic and Social Research cut its growth forecasts, forcing the FTSE 100 down a little further and toward its worst-ever January.
That said, trading has actually managed to sustain losses relatively well, given the huge losses announced in the US yesterday by AOL Time Warner.
The FTSE 100 dropped another 52 points to 3527.50 within an hour of opening this morning, after the National Institute of Economic and Social Research cut its growth forecasts for the UK to 2.2%, and worries about Royal & SunAlliance financial stability began to emerge.
Royal & SunAlliance lost 4p to 96 pence in early trading as a story in the Times suggests CSFB will cut its bond ratings status to "junk bond" if the FTSE falls under 3,400, because its solvency ratios will begin to look uncertain, according to news reports.
Other financial services firms are feeling the pinch too, as Amvescap, Europe's largest publicly traded money manager, lost 16.25p to 329.5p and Abbey National fell 9.5pto 393p.
Trading in the US seemed to suggests company consolidation it is not always a good for stockmarkets after all, given that AOL Time Warner is now worth almost a fifth of its original value before the two companies announced plans to merge in January 2001.
AOL Time Warner had been worth a combined total of around $330bn when they merged, however merger costs and other problems have now reduced the company to around 20% of that value. As a result, chairman Ted Turner has declared he will step down.
The Standard & Poor's 500 index closed down 19.75 or 2.3% to 844.61 and the Dow Jones dropped 165.58 points or 2% to 7945.13 while the Nasdaq - tech stocks index - lost 35.71 points or 2.6% to 1322.35.
AOL Time Warner tumbled $1.96 or 14% to $12 after revealing the company is reliant on its Time Warner division for revenue - through publishing and film production - having lost $98.7bn at America Online and through cable-TV.
Given the worries about the US economy and profit margins, Asian markets did well to limit the losses indices saw today, particularly when so many companies now rely heavily on overseas sales.
Japan's Topix closed down 0.5% to 821.18 today, led by Toyota Motor and Sony, while Singapore's Straits Times index fell 0.3% in just half-day trading.
Australia's S&P/ASX 200 index also saw its biggest weekly fall in six months as News Corp dropped, thanks to AOL Time Warner.
Most other markets were closed today in preparation for Chinese New Year celebrations.
The increase in minimum AE contributions has had little impact on opt-out rates - with cessations after April increasing by less than two percentage points, data from The Pensions Regulator (TPR) shows.
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