Reality hit bank stocks today forcing the FTSE 100 index down 19 points to 4,015.60 by the close as ...
Reality hit bank stocks today forcing the FTSE 100 index down 19 points to 4,015.60 by the close as investors heeded advice from Goldman Sachs to choose companies with significant capital cushions against bad debts.
The investment bank says bad debts are set to swell following recent warnings about the states of the US, European and UK economies.
Warnings also flew thick and fast concerning UK insurers, as watchers of ratings agencies Moody's and Standard & Poor's said they may be heading towards downgrading debt at a number of companies.
Abbey National fell 27p to 653p, LloydsTSB fell 9.5p to 546.5p, HSBC fell 7p to 700.5p, and Alliance & Leicester fell 7.5p to 856p.
Prudential fell 10.5p to 448p and Royal & Sun Alliance fell 1.5p to 123p.
Worst performer was Invensys, the factory automation tools maker that has results due on Thusday this week: it fell 5.5p to 58.5p.
Investors instead turned to tried and trusted bear market names, pushing up shares in Cadbury-Schweppes 10.25p to 420.5p, and Safeway up 6p to 232p.
Man Group climbed 22p to 978p.
Dixons gained 5.25p to 181p after the EU cleared its acquisition of Italy's most profitable electronics chain UniEuro.
UK mid-cap stocks also fared poorly, and the FTSE 250 index shed 45 points to close at 4,445.7.
A deal between chip developer Arm and US giant National Semiconductor was not enough to stop the stock sliding 7.25p or more than 12% to 50p.
And Aberdeen Asset Management resumed its fall, shedding 6.5p to 49.5p.
EasyJet managed at 24p gain to 370p despite warnings that firefighters at major UK airports may go on strike over pay and conditions in the runup to the important Christmas season.
In the US, the Dow Jones Industrial Average index is down 130 points to 8,405 so far today.
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