By Rebekah Curtis
LONDON, Jan 16 (Reuters) - Britain's top share index slid
1.6 percent to below 6,000 on Wednesday, pinned down in the red
by banks and commodities as stock markets worldwide recoiled on
the growing prospect of recession hitting the United States.
By 1150 GMT the FTSE 100 <> was down 96.2 points at
5,292.4, breaking below the psychological 6,000 barrier and at
its lowest point since mid-August 2007. The index has lost more
than 8 percent so far this year.
"We breached the 6,000 mark much quicker than I thought we
would," said David Buik of Cantor Index.
"I believe the pain is going to be excruciating, but it'll
be ... short-lived."
In the latest bout of news to magnify cracks in the U.S.
economy, Intel Corp <INTC.O> posted quarterly results and an
outlook behind Wall Street targets after the U.S. market closed.
[]
The FTSE fell 3 percent and Wall Street dropped more than 2
percent on Tuesday when recession fears were stoked by a record
loss at financial powerhouse Citigroup and the worst showing for
U.S. retailers in five years.
Japan's Nikkei <> fell more than 3 percent on Wednesday
and Wall Street is seen extending losses.
"It's much better to have a really sharp correction, shake
it out of the trees and let's get on with life," Buik said. "I
personally think that we're not a million miles from the
bottom."
Banks all fell and together swiped more than 30 points off
the index, with Lloyds TSB <LLOY.L> down 4.4 percent, HBOS
<HBOS.L> off 3.7 percent, Standard Chartered <STAN.L> down 4
percent and HSBC <HSBA.L> falling 3.3 percent.
ROCK AT NEW LOW
Embattled lender Northern Rock <NRK.L> hit a record low on
Tuesday when it plunged more than 24 percent to 52.5 pence
earlier in the day.
British Prime Minister Gordon Brown gave one of the
strongest indications yet on Tuesday that the troubled lender
could be nationalised before being privatised again at a later
stag0e.
Woolworths <WLW.L> tumbled 22 percent after the
sweets-to-DVDs retailer said trading over the key Christmas
period had been "very challenging" but it expected its retail
business to return to profitability this year.
A survey showed UK house prices fell in December at their
fastest rate since the recession of the early 1990s, raising
fears the country's housing market is heading for a sharp
downturn. []
Investors will keep an eye on U.S. inflation data due at
1330 GMT for further clues on the state of the economy.
All miners fell and the sector was a standout weight on the
index. Antofagasta <ANTO.L> and Vedanta Resources <VED.L> both
dropped 5.6 percent.
Rio Tinto <RIO.L>, fighting a takeover approach from rival
BHP Billiton <BLT.L>, shed 4.5 percent despite saying it
produced record tonnages of iron ore, copper and other
industrial minerals in 2007.
Imperial Tobacco <IMT.L>, which fell, and British Land
<BLND.L>, which rose, both traded without the rights of dividend
this session.
Oil shares also weighed as U.S. crude oil prices fell. BP
<BP.L> shed 0.6 percent. JPMorgan cut the stock's price target
to 650 pence from 690 pence and rated the stock at "neutral".
Astrazeneca <AZN.L> added 2.7 percent after Goldman Sachs
upgraded the drugmaker to "buy" from "neutral" and added the
stock to its conviction list.
Britain's biggest pubs company, Punch Taverns Plc <PUB.L>,
dropped 5.8 percent after saying trading over the Christmas
period was subdued, with declining consumer confidence
coinciding with the smoking ban in England and Wales.
Also in the sector, Mitchells & Butlers <MAB.L> shed 3.9,
but Enterprise Inns <ETI.L> reversed earlier losses to trade
higher.
Cable & Wireless fell 6.5 percent after Morgan Stanley cut
the stock to "equal weight" from "overweight".
(Editing by Paul Bolding)
