Market report: Thursday close

THE London market suffered another bloodbath today, plunging more than 4% to reach fresh five-year lows as investors suffered a deepening crisis of confidence.

By the close of trading the FTSE 100 Index was down 190.1 points at 4230, sliding through its recent low of 4392 to reach its lowest point since 3 April, 1997. More than £45bn was wiped off the value of blue-chip stocks in today's session, which followed yesterday's 122.8-point dive.

The Footsie spent the day in turmoil but the steep losses came after Wall Street opened lower again this afternoon. Downgrades on both General Motors and Ford and news of a criminal probe into US telecoms group Qwest hit sentiment. US shares were further hurt after it emerged the Securities and Exchange Commission was investigating drug giant Bristol-Myers Squibb to see whether the firm had inflated its revenues last year.

Fears about accounting standards and the health of the US economy have dogged Wall Street for months, and investors are increasingly worried about where the next scandal will come from.

In London, the falls were widespread and only two stocks from the Footsie managed to post gains.

The general advice to investors about the London market appeared to be: 'If you are in it, sit it out. If you are not in it, sit it out.'

Royal & Sun Alliance, down 20p at 212 3/4p, led the blue-chip fallers, closely followed by 3i Group which tumbled 39 1/2p to 593p. Aviva suffered a fall of 49p to 413p. Pharmaceuticals were also in the wars, led down by AstraZeneca, off 123p to 2342p, with GlaxoSmithKline 80p lower at 1190p and Shire Pharamceuticals down 20 1/2p to 556p.

Asset manager Amvescap, exposed as it is to the divng US equity market, was again among the blue-chip losers, falling 22p to 438p. Fund manager Schroders, down 29p to 505p, suffered from the effect of depressed markets on this side of the Atlantic.

National Australia Bank spokesman Brandon Phillips described talk of a bid for Abbey National as 'speculation' and its shares promptly fell 56p to 770p. America's share problems may be bad but the 'Almighty Dollar' was also being battered. Any company with large dollar earnings was in trouble from the outset and Reed Elsevier slipped 16 1/2p to 533 1/2p while EMI lost 16 3/4p to 220 1/4p.

Reuters suffered a Morgan Stanley downgrading to 'underweight' from 'equal weight' and the broker also cast doubt on its support level of 300p. Its shares promptly began to test such lows with a 16p fall to 317p, giving it early leadership of the blue-chip casualties.

The Compass Group sell-off of Travelodge and Little Chef will hit earnings, said Schroder Salomon Smith Barney, and it downgraded the shares to 380p, as the market chipped off 25 3/4p to 339 3/4p.

As if the market's woes were not enough, SAB Miller announced cancellation of its planned £614m placing because of poor market conditions. Its shares rose 3 1/2p to 507p. The only other riser was tobacco firm Gallaher, up 6p at 615p.

Insurance group Heath Lambert decided to delay its £470m float, another bear influence on the market.

Consultation on the abolition of the historic levy of North Sea oil and gas which could save up to £200m a year began today. But oil shares were in no mood to respond positively as BP fell back 24p to 513p and Shell faded 19 1/2p to 456 1/2p

IT consultant Anite hit a new low of 22p, down 13p.

Prices and indices in this section are supplied from various sources and calculated at different times and may not always match those listed on the site.

The Daily Mail's Geoff Foster on yesterday's trade
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