LONDON Dec 17 Britain's leading share index
tumbled 1.3 percent early on Monday, tracking falls in U.S. and
Asian markets after strong U.S. inflation data dimmed hopes for
more rate cuts by the Federal Reserve.
At 0841 GMT, the FTSE 100 .FTSE was down 80.8 points at
6,316.2, led by banks and miners. The UK benchmark index lost
2.4 percent last week, but it is still up 1.5 percent for the
European shares were also lower in early trade. Asian shares
fell, with Japan's Nikkei average .N225 down 1.7 percent,
while Wall Street was down about 1.3 percent on Friday.
"It looks like the Christmas rally that we were hoping for
is not going to materialise. There is a lot more selling
pressure in the U.S. than I had thought. I don't think the UK
stock market wants to sell off but I don't think it has much of
a choice," said Tom Hougaard, chief market strategist at City
"The Dow fell out of bed (on Friday) and Asia really took it
on the chin overnight ... If we had not seen such a weak Asian
market, we would have been OK."
Banks, which have been battered by a global credit market
turmoil in recent months, were one of the worst hit sectors,
shaving more than 18 points off the index.
Barclays (BARC.L), Royal Bank of Scotland (RBS.L), HBOS
HBOS.L, HSBC (HSBA.L), Lloyds TSB (LLOY.L), Northern Rock
NRK.L and Alliance & Leicester ALLL.L all fell between 0.7
and 3.6 percent.
The Confederation of British Industry said Britain's economy
would decelerate markedly next year as the credit squeeze and
higher commodity prices take their toll. [ID:nL14885341]
Also, a survey by property Web site Rightmove showed house
price inflation in England and Wales fell to 4.8 percent in the
month to Dec. 8, its lowest in nearly two years, from 7.9
percent, partly due to a surge in the number of smaller homes
being put up for sale. [ID:nL14885262]
Miners were also standout losers as metal prices eased on
concerns of slowing global growth sapping demand. BHP Billiton
(BLT.L), Rio Tinto (RIO.L), Anglo American (AAL.L), Xstrata
XTA.L, Vedanta Resources (VED.L), Kazakhmys (KAZ.L) and Lonmin
(LMI.L) all lost between 1.8 and 3 percent.
Oil shares also suffered as crude prices CLc1 hovered
above $91 a barrel following a two-day, $3 fall. BP (BP.L)
slipped 0.8 percent, while both Royal Dutch Shell (RDSa.L) and
BG Group BG.L dipped 0.6 percent.
GlaxoSmithKline (GSK.L) dipped 1.1 percent. The drugmaker
said U.S. regulators were seeking more information before the
possible approval of GlaxoSmithKline's cervical cancer vaccine,
Smith & Nephew (SN.L), however, was up 0.6 percent.
(Editing by Quentin Bryar)