Mounting fears over plans to taper America's massive economy-boosting programme sent London's blue chip share index to a six-week low yesterday.
A busy week for US economic updates frayed the nerves of investors, with markets keenly waiting for key US jobs figures on Friday for a clearer signal on whether the Federal Reserve will start to reduce stimulus on December 18. The FTSE 100 index fell 55 points on Monday and was down another 62.9 points or one per cent to 6532.4, with markets also lower across Europe and the US.
As well as the continued Federal Reserve speculation, analysts received downbeat figures showing that spending was weaker than expected over the thanksgiving holiday. The Dow Jones industrial Average on Wall Street fell 0.7 per cent in early trade, while the Dax in Germany and France's Cac 40 were both 2 per cent lower. Sterling moved higher against the US dollar, helped by more UK economic cheer after a closely watched survey showed activity in the construction sector grew at its fastest pace since August 2007 last month amid a house building boom. The pound rose to $1.64 and held firm at n 1.21.
Mining stocks were among those seeing declines on the FTSE 100, with Chilean copper miner Antofagasta declining 26.5p to 754p and Randgold Resources off 140p at 4017p, a drop of 3 per cent.
High street chain next was the biggest riser in the FTSE 100 after the British Retail Consortium reported a pick-up in clothing and footwear sales towards the end of november. Shares were 115p higher at 5515p, a rise of more than 2 per cent. Other retail stocks were on the front foot, with Sports Direct international up 0.5p to 744p and Ted Baker 100p higher at 2128p in the FTSE 250 index.
A shortened risers board in the FTSE 100 also featured bookmaker William Hill after broker UBS said the pull-back in the company's shares since last summer looked to be overdone. The note gave a lift to William Hill's shares, which improved 6.1p to 387.1p. In corporate results, pub chain Greene King's interim figures failed to stir buying interest, despite the Loch Fyne and Hungry Horse owner reporting a 5.7 per cent rise in underlying profits to £85.6m.
Chief executive Rooney Anand said the industry was still reliant on meal deals as customers remain careful with their money, particularly outside London and the South East. Shares were 31p lower at 851p.
Meanwhile, struggling pawnbroker Albemarle & Bond slid another 22 per cent or 4.1p to 14.9p after it put itself up for sale in an effort to resolve its funding crisis. n 1 Singer analyst Andrew Watson warned that any sale was unlikely to attract significant value for shareholders, who have already seen the stock plunge by 91 per cent over the past year. The biggest FTSE 100 risers were next up 115p to 5515p, Smith & nephew ahead 15.5p to 828.5p, William Hill 6.1p higher at 387.1p and Tate & Lyle 6.5p stronger at 786.5p. The biggest FTSE 100 fallers were CRH down 68p to 1471p, Melrose industries off 10.4p to 280.3p, old Mutual 7p lower at 189.2p and Antofagasta 26.5p weaker at 754p.
* ON THE UP: High street chain Next was the biggest riser in the FTSE 100