FTSE 100 drops over 2% as banks battered


FTSE 100 drops over 2% as banks battered
The FTSE 100 was down over two per cent today, as more economic bad news hit the markets.

A fall in property sales, rising inflation, and poor retail figures combined with downbeat statements from the Federal Reserve chairman Ben Bernanke, brought the FTSE 100 down 2.42 per cent to 5,171.90.

During the day the index was down to 5,119 – the lowest since June 2005.

Banks and miners took a particular hit over the day with Royal Bank of Scotland down 7.67 per cent while Antofagasta, Lonmin and Vedanta Resources dropped 7.01 per cent, 6.93 per cent and 6.17 per cent respectively.

Carphone Warehouse dropped 6.39 per cent.

However, the travel industry performed well aid the downcast day, with British Airways up 5.31 per cent, TUI Travel rising 3.22 per cent and Thomas Cook climbing 2.1 per cent.

Morrison Supermarkets and Imperial Tobacco both rose 1.85 per cent.

Ryan Kneale, market analyst at BetsForTraders.com said: "If we thought March's falls were approaching apocalyptic, then July's falls would have you believe it is the end of the world!

"There is not even an iota of good news out there today, UK inflation is now nearly double the Bank of England's 2% target and with house prices falling and consumer confidence around the globe at an all time low, you are left wondering is there further to fall?"

He added the firms clients come out in force on days like today and the most bet on stock today is RBS, whose share price fell over seven per cent this morning.

"Of these bets just over 87 per cent were betting on further falls in their already battered share price and this indicates that only a small minority see an end to the steep falls we have experienced so far this year," he said.

Tim Hughes, head of sales trading at IG Index, said: "After the short lived euphoria of the weekend rescue of Fannie Mae and Freddie Mac in the USA, many are now viewing the government bail-out as a sign of just how bad things have got in the financial sector.

"If this is not the end then the concern is which companies may not prove important enough to be saved by the state – a thought that has sent investors in financials heading for the exits today."

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