FTSE down as jitters hit financials

By MoneyhighStreet Staff. Published on August 26, 2008 This post currently has no comments.

Newspaper
Fears over the prospects for financial companies and falling mining and petrochemical stocks lead UK shares down in trading today.

At the end of the session the FTSE 100 index was down by 17.96 points to 5,487.60.

Losses were driven by financial companies which were hit by news of the collapse of Colombian Bank and Trust of Kansas - the ninth US lender to fail this year amid turmoil in the financial markets.

Meanwhile, prices for miners and oil companies slid on falling commodity prices, with oil falling to $113 per barrel.

Diversified miner Rio Tinto slipped 109p to 5055p, despite its announcement that its interim earnings had risen by 55 per cent on an annualised basis.

Mike Lenhoff, chief market strategist at Brewin Dolphin, told the Reuters news agency: "It''s a little discouraging but I suppose it''s something we have to expect in a way because we will be constantly shocked with credit worries.

"The banks have pretty well lost so much capacity to finance economic growth…the whole question about progressing is a little up in the air. At the same time, the central banks can''t do much about it because inflation has accelerated from targets. The market is caught in a trap."