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Footsie plunges as fears over recovery spread; CITYBULLETIN.

THE FTSE 100 Index plunged more than 3% yesterday as fresh doubts about the state of the global economic recovery shook stock markets.

Investors shied away from riskier assets amid worries over faltering growth in China and a far worse-than-expected plunge in US consumer confidence.

The Footsie eventually finished 157.5 points lower at 4914.2 or 3.1% - its lowest close since September - with every blue-chip stock in the red.

Wall Street's Dow Jones also plunged more than 2% in early trading, while the Dax in Germany and France's Cac 40 both fell more than 3%.

The effect of European austerity added to the negative mix, while looming repayments of European Central Bank loans also led to fresh fears over liquidity pressures in banking. The euro fell to a new 19-month low against the pound of almost 1.24, while sterling also touched 1.51 against the dollar at one stage.

Mining firms were hardest hit, with Rio Tinto down 208p to 3048p - more than 6% - as metal prices slipped.

Under-pressure BP's shares were back near last week's 14-year low after dropping 5.35p to 302.9p. Royal Dutch Shell dropped 53p to 1638.5p.

Barclays was also among the leading top-flight fallers, with a 6% or 18p slide to 267.35p, as the stock continued to suffer following Monday's rating downgrade from Nomura.

In corporate news, shares in Carpetright fell by more than 10%, down 70p to 640p, after its full-year results came in slightly below market expectations.

The biggest fall in the FTSE 250 Index was again posted by Connaught as investors continued to dump shares in the social housing firm after Friday's warning that the emergency Budget would hit revenues and profits. Shares, which were at 325p last week, tumbled another 27.8p to 107.2p or 21%.

But fresh takeover developments drove a further rise in shares in power protection specialist Chloride, which climbed 11% or 38.6p to 387.1p.

Comet electricals chain Kesa was another strong riser early on after activist investor Knight Vinke increased its stake in the retailer to 3%.

The biggest Footsie fallers were Rio Tinto down 208p at 3048p, Barclays down 18p at 267.35p, Xstrata off 58.7p at 908.7p and British Airways down 12.4p at 197p. There were no Footsie risers.
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Title Annotation:Business
Publication:Western Mail (Cardiff, Wales)
Date:Jun 30, 2010
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