Fears for the world’s two powerhouse economies pushed world markets sharply into reverse today.
China’s stock market recorded its biggest fall in a year and a half after the Chinese Government announced new steps to cool the booming housing market, dampening sentiment in London where the FTSE 100 Index closed 33 points lower at 6,345.6.
On Wall Street the Dow Jones Industrial Average was also lower after Barack Obama was forced to sign off billions of dollars of budget cuts drawn up two years ago, which he has warned will damage US prospects.
In London’s top flight index, shares in HSBC fell 2% after it reported a 6% fall in pre-tax profits to £13.7billion.
Shares were down 18.1p to 710p, while Lloyds Banking Group fell 2p to 51.3p and Royal Bank of Scotland slipped 7.1p to 306.9p.
Department store Debenhams also suffered in the FTSE 250 Index, falling 15%, after sales figures were hit by the January snow. It lowered its first half profit expectations to £120million, compared with City expectations for around £131million, after underlying revenues fell 10% in the affected period between January 14 and 27.
Shares slid 13.9p to 80.7p, while the update caused alarm among other retail shares, with Next down 3% or 106p to £41.41 and Marks & Spencer off 6.7p to 362.8p.
The biggest FTSE 100 risers were Capita up 25.5p to 884p, GKN ahead 6.5p to 275.9p, Admiral Group 29p higher at £12.76 and Petrofac up 31p to £14.66.
The biggest FTSE 100 fallers included Kazakhmys down 35p to 555p, Rio Tinto 126p lower at £33.16 and Evraz down 7.5p to 254p.
Carrie Keenan, of investment manager and financial planning specialist Brewin Dolphin in Aberdeen, noted that Parkmead Group added 2.78% at 14.125p and Cairn Energy rose 1.55% to close at 275.45p
Fallers included STV Group, which lost 2.19% at 134p, while Hunting weakened 1.16% at 848.75p.