Healthy mortgage figures fail to lift banks
AS the City braced itself for the expected demonstrations to coincide with Wednesday and Thursday’s G20 summit in London, the FTSE 100 Index started the new week on the back foot with a 3.5% decline to 3762.91.
Financial shares were hard hit, as all the major banks in the index fell after the break-up of the Dunfermline Building Society.
Among the biggest losers was Lloyds Banking Group, whose shares declined 11.3p to 64.8p, and Barclays, which ended the day 24.7p lower at 149.1p.
Insurers saw similar heavy losses with Aviva giving back more of its recent gains with a 14.5% fall to 202.5p, down 34.5p and Legal and General whose shares fell 5p to close at 41p.
Weakness in the banking sector and the market as a whole was revealed despite news that mortgage approvals were at their highest since last May.
News from across the Atlantic that major carmakers GM and Chrysler may face bankruptcy added to the gloom and contributed to weak trading on most major markets.
Bullish comments from Gordon Brown and US President Barack Obama regarding possible deals to stimulate the global economy at this week’s G20 summit failed to arrest the slide that had affected Asian, European and US indices.
Despite the difficulties in the wider market and a lack of corporate news, there were still shares in the regional portfolio that closed up. Immunodiagnostic Systems advanced 9.5p to 184.5p and residential landlord Grainger gained 5p to end the day at 105p. Meanwhile housebuilder Bellway spent most of the day in positive ground, before closing just 2p lower at 648.5p, ahead of its half yearly results today.
John Dance
