FTSE ends lower, below key level as growth worries weigh
* Financials fall as euro zone debt woes resurfaceBy David BrettLONDON, Oct 18 (Reuters) - Britain’s leading share index
ended lower on Tuesday as nervous investors retreated from
riskier assets, forcing the FTSE 100 below a significant
technical level as global growth concerns returned to haunt the
market.The blue-chip index fell 26.35 points, or 0.5
percent, to 5,410.35 — below the 5,450 level it has managed to
close above just once since early August — as investors pulled
out of the mining and banking sectors.The FTSE bounced off a session low at 5,348.64, tracking
movements on Wall Street as market volatility continued
in thin trade.Echoing difficulties faced by investment managers, U.S.
investment bank Goldman Sachs reported its second
quarterly loss as a public company, blaming difficult market
conditions and a lack of confidence among investors and
corporate clients.That confidence had been further eroded overnight by figures
from China showing quarterly growth at its weakest pace in two
years, highlighting the impact an uncertain recovery in the
United States and lingering debt problems in Europe was having.Investors had seen China, along with other Asian economies,
as providing sustainable growth for businesses while developed
economies struggled.Asia-focused bank Standard Chartered fell 2.8
percent, among the worst hit financials.Traders said Standard Chartered shares were not helped by
uncertainty after Singaporean state investor Temasek
launched a bond exchangeable into the London-listed bank’s
shares.Sentiment was dealt a further blow when Moody’s cast doubts
over France’s AAA credit rating, and Germany’s finance minister
played down heightened expectations that European Union
governments will resolve the region’s sovereign debt crisis at a
summit on Sunday.Meanwhile, inflation in Britain hit a three-year high in
September, heaping pressure on corporates already faced with the
rising unemployment figures sapping demand.”Actions by western Governments and central banks will
engineer persistent inflation despite high levels of
unemployment (stagflation) and very weak growth in developed
markets,” Ana Armstrong, managing partner of Armstrong
Investment Managers said.Armstrong said allocations to high-yielding equities, with
stable cash flows, and with pricing power will be the best
performers in this type of environment.Morgan Stanley published a note listing companies with
long-term sustainable competitive advantages — included
Experian , InterContinental Hotels , Imperial
Tobacco , Rio Tinto and Rolls-Royce .Rolls Royce and IMI were among the top risers up 1.6 percent
and 2.2 percent, respectively.Elsewhere, Whitbread rose 0.5 percent after
Britain’s biggest hotel and coffee shop operator reported a
higher-than-expected first-half pretax profit and hiked its
dividend over 50 percent.Bargain hunters picked up G4S , which bounced 9.8
percent, having slumped more than 20 percent on Monday when
announcing a deeply discounted rights issue to pay for its 1.5
billion pound acquisition of Danish frim ISS .Tullow Oil rose 2.5 percent with traders expecting a
well update from the oil explorer soon.
