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FTSE falls further as sell-off continues
Wednesday February 28, 4:00 am ET
By Michael Hunter


London's three heavyweight sectors continued to take a battering as the FTSE 100 index fell further on Wednesday, as global losses continued to undermine the market.
The FTSE 100 started the session 1.1 per cent weaker at 6,218.1, with mining stocks, banks and oil heavyweights all making losses after Asian and US indices fell overnight. The decline wiped out the gains made by London's senior index since the start of 2007.



The Dow Jones Industrial Average closed 3.3 per cent weaker at 12,216.2, on worries about the US subprime mortgage market combined with a warning about a possible recession from Alan Greeenspan, former chairman of the Federal Reserve, reverberated around dealing rooms.

The sharp downturn in global economic sentiment, sparked by steep losses on Chinese equities markets leading to fears of an over-optimistic outlook for growth there, once more put the London-listed mining sector at the vanguard of the losses. Xstrata fell 3.7 per cent to £23.88 with BHP Billiton (NYSE:BHP) 3.2 per cent lower at £10.17. Antofagasta lost 3 per cent to 459.5p and Kazakhmys lost 3 per cent to £11.03.

Fears for over-stated Chinese demand also hit the oil majors. Crude prices lost around 1 per cent to below the $61 a barrel mark. BP fell 1.7 per cent to 526p and Royal Dutch Shell lost 0.7 per cent to £16.83.

Man Group, the world's largest listed hedge fund, fell in line with the wider sell-off. The company was 3.6 per cent lower at 535½p.

Banks were sharply lower, led by HBOS after it reported annual profit in line with forecasts but warned of increased margin pressure in the coming months. The owner of the Halifax chain fell 4.3 per cent to £10.83. In the wider sector, Barclays (NYSE:BCS) lost 2.7 per cent to 747.6p, Northern Rock fell 2 per cent to £11.33 and Royal Bank of Scotland was 1.7 per cent lower at £20.30.

The sharp losses on Asian markets had a more pronounced effect on Standard Chartered, the UK bank focused on emerging markets. It fell 4.3 per cent to £13.68.

Amvescap, the fund manager highly exposed to US markets, fell 2 per cent to 595p