FTSE 100 slumps again

Tuesday, 20 January 2009 12:00

The FTSE 100 has fallen into the red for another day, led by a slump in banking shares.

The index fell 1.03 per cent to 4,066.30, led by a sharp decline in Lloyds Banking Group, down 35 per cent over the day to end at 42p.

Barclays shares were also trading lower and ended 18.75 per cent down, while Royal Bank of Scotland edged down 12 per cent to hit 10.10p.

Once again, defensive stocks climbed, with British American Tobacco rising 1.94 per cent and AstraZeneca up 1.12 per cent.

Sterling also fell to a seven-and-a-half year low against the dollar, amid investor fears for the UK economy.

Anthony Grech, market analyst for IG Index, said: "Yet again the banks have held centre stage: this time around it was Lloyds, which today plunged to a 20-year low.

"Investors are still showing little interest in buying bank shares - even at these bombed-out prices.

"Despite the ongoing turmoil in the banks and, as yet, the lack of an Obama-bounce from the US, the FTSE still seems well supported by the 4,000 level.

"There have been a few hairy downhill rides towards the 4,000 mark over the past couple of days, but - for the moment at least - traders are still viewing it as a line in the sand."

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