FTSE sees deeper shade of red in global slide

Britain's leading share index notched up a third day of losses on Thursday, sinking in choppy trade in the wake of steep falls across world markets, but Royal Bank of Scotland shares shone on earnings.
The FTSE 100 index ended 55.5 points, or 0.9 percent lower at 6,116, having shed 5 percent in three days after a slide in China's main index on Tuesday sent shock waves through global equity markets.
A raft of stocks rode the storm, however, with Royal Bank of Scotland gaining 3 percent after narrowly beating analysts' expectations with a 14 percent rise in 2006 underlying profit, and after saying it would raise its dividend by 25 percent.
Also on the upside, British American Tobacco added 1.6 percent after posting a 10 percent rise in 2006 earnings. The world's No 2 cigarette maker dampened talk it may make a big acquisition as it boosted its dividend and share buy-backs.
The index reversed earlier gains, having opened the session in positive territory as investors dived in to pick up shares made cheaper by recent declines.
"It's quite interesting today that the market hasn't held the strong opening that we saw this morning. That is quite a good sign that we're probably due for some short term weakness." said Graham Secker, an equity strategist at Morgan Stanley.
"We're going to have some choppy markets ... some good up days and some very bad down days," he added.
European markets headed deeper into the red after Wall Street opened lower on Thursday, as gains in the yen raised concern that investors were being forced to unwind risky trades based on borrowing yen.
Merger-and-acquisition talk offered UK investors some respite, with Sainsbury up 2.2 percent after Marks and Spencer Group confirmed it had considered making a bid for Britain's third biggest supermarket but had decided to hold off for now.
Leading the index's downside, however, Aviva sank 4.7 percent. The insurer posted a 12 percent rise in 2006 profit, as higher earnings at home offset lower margins in some European markets.
Miners, which extended their recent slide, failed to take inspiration from healthy metal prices. Xstrata dropped 2.3 percent, Kazakhmys lost 2.2 percent and Lonmin shed 2 percent.
Oil stocks also contributed to the downside, with BP down 0.9 percent and Royal Dutch Shell losing 0.3 percent as US crude oil prices fell below $62 a barrel, pressured by concerns about weakness in world stock markets and the health of the US economy.