Banking worries push FTSE down

By MoneyhighStreet Staff. Published on August 21, 2008 This post currently has no comments.

House building
Continued worries about banking stocks in the UK forced the FTSE 100 index to close down today (August 21st), despite a late rally that picked the blue chip index up from its mid-morning lows.

The Guardian reported that "renewed credit jitters" drove the FTSE down towards 5,325 during morning trading.

It suggested that continued concerns about beleaguered US mortgage finance companies Fannie Mae and Freddie Mac continued to exert their influence in London.

However, the market eventually rallied, peaking above 5,400 before sliding to close at 5,370.20 - down 1.60 points for the day.

Lloyds TSB shed 3.5 per cent to close at 280 and HBOS dropped by a similar percentage to finish the day at 272. Barclays and Royal Bank of Scotland also struggled.

Interestingly, UK building companies were some of the biggest gainers today, with Persimmon and Barratt both around ten per cent.

The optimism was prompted by Persimmon''s first half results. Despite showing a 64 per cent drop in profits, the building company remained upbeat about the rest of the year and showed that write-downs on its land portfolio were smaller than expected.

Website Forbes.com noted: "It now seems that the company could emerge from the economic downturn ahead of its competitors."

As a result, Persimmon closed up 28.50 points at 327. Barratt also benefits from renewed confidence in the building sector, closing up 15.5 points at 128.25.

Elsewhere, rising oil prices hit low-cost carrier easyJet, which dipped four per cent to 324.