FTSE 100 falls back as optimism fades
Wednesday 15th April 2009, 9:41AM BST.
The FTSE 100 dipped slightly in early trade to remain under the 4,000 benchmark, as yesterday’s rally in mining and financials reversed.
By 08:30 BST, the index dropped 11 points to 3,977.91 after yesterday’s optimism receded on weaker-than-forecast US retail sales, reminding investors that the recession is far from over.
While defensive stocks such as pharma firm Shire made up some of yesterday’s lost ground, rising 1.49 per cent, mining and banking stocks fell.
Rio Tinto dropped 4.76 per cent, while Xstrata was 4.56 per cent down. Barclays fell 3.58 per cent, and Lloyds Banking Group was trading 3.07 per cent lower.
Over in the US, the Dow Jones was 1.71 per cent off, while the S&P 500 fell 2.01 per cent.
Although the results from Goldman Sachs yesterday initially boosted shares in the banking sector, analysts are concerned other banks will want to follow its lead of issuing shares, which would dilute existing holdings.
Meanwhile, retail sales in March fell unexpectedly after two months of rises.
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