FTSE pares some losses after global rout
LONDON (Reuters) – The leading share index halved earlier losses by mid-session on Wednesday, but stayed deep in the red after a dive in Chinese stocks the previous day sent tremors through global markets. By 11:51 a.m. the FTSE 100 (news) <.FTSE> index was 51.4 points, or 0.82 percent lower at 6,234.7, having fallen about 2 percent in early trade. The index fell in line with other major European markets, as a global rout followed a plunge in China’s main index on Tuesday, triggered by fears authorities would crack down on stock market speculation.Banks fell heavily amid global economic concerns, accounting for 30 percent of the index’s downside, with Britain’s biggest mortgage lender HBOS dropping 3.5 percent after reporting a muted outlook and worries over its margins. The bank (TBHS – news) also said it beat market forecasts with a 14 percent rise in 2006 profit as it kept a tight rein on costs.
Other banks also extended the previous day’s heavy losses, with Standard Chartered (STAN.L – news) down 1.2 percent, Barclays (BARC.L – news) falling about 2 percent, and Lloyds TSB shedding 1 percent.
“The shocks of the market correction set off by China are still being felt around the world as the hangover continues to dampen investor mood,” said Matthew Bristow, manager and head of trading at Pacific Continental Securities.
“This will mean that investors will be more critical of economic data as the current state of the economy is still of uncertainty and the perfect storm caused panic within the markets,” he added.