BRITAIN'S leading share index tumbled more than 1 per cent yesterday, racking up its first weekly fall in a month, as investors contended with wider-than-expected losses at US insurer American International Group.
AIG's dreary numbers sent UK fina
ncial stocks reeling while miners tracked weaker metal prices.
The benchmark FTSE 100 index closed down 66.1 points at 6,204.7, for a weekly loss of 0.2 per cent. The Footsie has gained nearly 15 per cent since the middle of March when it hit its lowest closing level in 2008 to date. However, the index is still down about 4 per cent for the year.
Tim Whitehead, head of portfolio services at Redmayne-Bentley, said: "I don't find it particularly disconcerting. I think the market seems reasonably stable and if ... the financial situation stabilises, it shouldn't be too bad.
"I am hoping that the 6,000 is now representing the support rather than the resistance level."
CMC Markets dealer Jimmy Yates added: "Those massive losses from AIG and a downbeat outlook from Toyota have certainly dampened the overall mood for global equities and in many respects it's surprising that the FTSE hasn't fared any worse through the day."
Banks shaved 20 points off the Footsie, with Royal Bank of Scotland suffering a near-3 per cent retreat to 347p. Barclays fell 2.5 per cent to 451.5p and HBOS shed 1.7 per cent, or 8.5p, at 505p.
A rating downgrade from Morgan Stanley also hurt HSBC, Britain's biggest bank, which closed 1.8 per cent down at 866p.
AIG, the world's largest insurer, reported a record quarterly loss of $7.8 billion (£4bn), largely as a result of writing down assets that have links to subprime mortgages.
Carphone Warehouse was the worst performer in the top flight, down more than 7 per cent as investors expressed disappointment with Thursday's announcement of a £1.1bn deal with US consumer electronics group Best Buy. A "sell" recommendation from Citigroup in the wake of the retailer's plans to create a European consumer electronics empire sealed the group's share price woes, with the firm dropping 21p to 268p.
Miners were in negative territory as Kazakhmys fell nearly 7 per cent, or 128p, to 1,786p after revealing it had rejected an approach from Kazakh rival Eurasian Natural Resources, which was 19p better at 1,307p.
Elsewhere in the sector, Antofagasta was off 32.5p at 777p and Vedanta Resources down 97p at 2,400p.
With oil trading at fresh records, British Airways was a casualty. It dropped 10.25p to 228.25p as investors braced themselves for more fuel hikes.
Among the Footsie risers, supermarkets fared better, with Morrisons up 2p at 290p after JP Morgan raised its price target and said the group had more operational momentum than its peers. Rival Sainsbury's was 3.5p better at 398.75p.
The full article contains 502 words and appears in The Scotsman newspaper.
