FTSE 100 close: Footsie felled as optimism fades
The FTSE 100 fell today, dragged lower along with global markets despite encouraging news of a recovery in Japan.
Blue Monday: Shares are expected to start the week lower.
In a quiet day for UK corporate news, shares in London took their lead from Tokyo, Shanghai and Hong Kong and headed lower.
Investors have been taking profits after the strong run for global markets and not even news that Japan's economy grew 0.9% in the three months to June, ending its longest recession since the Second World War, could reverse the falls.
By mid-morning the FTSE 100 stood 79.7 points lower at 4634.27 after Asian markets overnight suffered falls of up to 6%. The FTSE finished down 68.96 points at 4645.01.
Analysts put the falls down to the damaging news on Friday that US consumer confidence had fallen.
David Mor
'It all just feels like we're running out of steam (on the FTSE). We've had a great summer so far. The index might be taking a breather and pausing a bit or it might be the start of a realisation that we have really overcooked this.'
While Japan has now joined France and Germany in exiting recession, a slow recovery for the US has far reaching implications.
Commodity stocks fell as markets anticipated further pressure on demand, with oil prices also plunging below $66 a barrel as a result.
Among miners, Xstrata lost 43p at 742p and Anglo American fell 107p to 1820.5p.
There were only a handful of stocks on the Footsie risers board, led by insurer Aviva with a gain of 6p to 377.8p thanks to a positive broker upgrade from HSBC.
Property firms were also pulling the London market lower as last week's excitement over a possible £10 billion bid for British Land started to fade.
Liberty International dropped 15.3p to 472.4p, Hammerson dropped 13.2p to 390.3p and British Land declined 16.3p to 496.2p.
Weekend speculation regarding a possible £500m rights issue by Barratt Developments caused its shares to decline 13.7p to 226.4p.
Tomorrow's agenda
British Land, the property giant which was rumoured to be the subject of a potential bid from a consortium including steel tycoon Lakshmi Mittal, posts first-quarter figures. The company, which owns the Broadgate development in the City, is tipped to report another fall in earnings. Investors will be keen to hear any information on any possible acquisitions and chief executive Chris Grigg's comments on future strategy.
The market will also look closely at the valuation of its portfolio and for its outlook on commercial property prices. There could be some relatively good news amid signs that the value of some properties is starting to rise. The latest monthly index from CB Richard Ellis showed that property values in the sector rose by 0.2% on average in July, with retail warehouses - 26% of British land's portfolio - the best performer.
Inflation slipped back to 1.8% last month. HSBC reckons that the consumer price index will have fallen further to 1.7% but higher house prices will see the retail price index rise to 1.5%.
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