Publications
Partners
London - Concerns over the global economic recovery sent Britain's top share index lower on Wednesday, with commodity stocks and banks leading the fallers as the FTSE 100 index headed below a key technical level.
"The index is trading around 5 800 at the moment, below its 200-day moving average (5 815). If the index closes below that level it would send out a bearish signal to investors," Jimmy Yates, head of equities at CMC Markets, said.
The FTSE 100, tracking overnight falls on Wall Street and in Asia, was down 69.89 points, or 1.2%, at 5,794.76 at 1050 GMT, having closed up 1.49 points on Monday.
Investor confidence took a pounding as fears over the sustainability of fragile economic recovery intensified.
On Tuesday, US Federal Reserve chairman Ben Bernanke offered no indication that new stimulus measures were on the cards, following a recent swathe of downbeat data from the world's biggest economy.
"The US is taking its foot off the gas with regards to stimulus and there is a fear the economy won't be able to stand on its own two feet and we will head back into recession," said Martin Dobson, head of trading at Westhouse Securities, adding more quantitive easing looked unlikely in the near term.
A threat to Britain's top-notch sovereign credit rating by ratings agency Moody's did nothing to improve sentiment.
Flight from risk
Commodity stocks, a barometer of investor appetite for risk, fell in tandem with commodity prices.
Precious metals miner Fresnillo and global miner Xstarta fell 3.6% and 3.4% respectively.
BP, which said it remained optimistic of securing a tie-up with Russian group Rosneft "in some form or another" following the collapse of its Arctic exploration and share swap deal with the firm, shed 1.6%.
The oil major fell in tandem with crude oil, which was also lower as OPEC remained undecided about a Saudi-led plan to increase supplies and try to cap inflated world crude prices.
Ex-dividend factors trimmed 0.4 point off the FTSE 100 index, with Associated British Foods and Johnson Matthey losing their payout attractions.
On the upside, AsatraZeneca gained 0.7%, helped by its buying its own shares and upbeat comment from a Swedish broker.
Outsourcers Capita and Serco, up 1.0% and 0.4% respectively, also featured on a FTSE gainers' board consisting of just four stocks, after bullish results from small-cap outsourcer uservoca.
On the second line, British pubs group Punch Taverns added 7.9% after reporting a sharp rise in sales at its Spirit managed division and saying it was on track to complete a demerger by the end of the summer.
Misys took on 4.3%, buoyed as Jefferies International raises its target price and estimates.
US stock index futures pointed to a weaker open on Wall Street on Wednesday, with little data due across the Atlantic apart from the latest Fed Beige Book at 1800 GMT, after London's close.
