Britain's top share index joined a decline in global stocks on Friday, tracking sharp losses across the Atlantic as credit fears re-ignited to knock banks on the 20th anniversary of Black Monday. The FTSE 100 ended down 81.5 points, or 1.2 percent, at 6,527.9, with all sectors ending the session in the red.
"It's pretty miserable," said Richard Hunter, head of UK equities at Hargreaves Lansdown. "Next week's another week and perhaps we can start off on a stronger footing, but in terms of today there's a dearth of good news," he added.
"There may be a possibility that we'll get good news next week, we've got quite a few of the bigger stocks either with reports or updates, the likes of Shell, BP or Glaxo."
The Dow dropped sharply on worries about the economy after manufacturer Caterpillar cut its profit outlook. Friday's losses in Asian, European and US shares coincided with the 20th anniversary of the 1987 Wall Street stock market crash, known as Black Monday, when the Dow Jones industrial average tumbled 22.6 percent, its biggest one-day percentage drop.
"There's certainly been no shortage of speculation this week as to whether or not equity markets would commemorate the 20 year anniversary of black Monday with a degree of selling, and Wall Street, for the time being, seems to be delivering on these expectations," a trader said.
Banks accounted for about a third of the downside as credit worries returned among investors after disappointing earnings from Bank of America on Thursday. Northern Rock, Britain's most prominent casualty of the global credit squeeze, dropped 8.6 percent.
All stocks in the sector ended lower, with HSBC down 2.1 percent, Royal Bank of Scotland off 2.5 percent and Barclays down 2.2 percent. Oil shares slipped as crude prices reversed earlier gains. Crude fell after earlier surging to a record high above $90 a barrel as tight fuel stocks ahead of winter and a softening US dollar spurred investor buying.
Oil major Royal Dutch Shell lost 1.2 percent, its rival BP went down 0.8 percent and BG Group shed 1.9 percent. All miners traded lower, with Rio Tinto off 2.8 percent, Kazakhmys down 1.4 percent and Anglo American off 1.5 percent. WPP, the world's second-largest advertising and marketing services firm, shed 4.2 percent after it posted third-quarter underlying revenue growth of almost 5 percent, near the lower end of forecasts.
Astrazeneca dropped 3.6 percent after UBS cut the drugmaker to sell from neutral and after the European Patent Office revoked a patent on its key asthma drug Symbicort. On the upside, Redrow rose 3 percent on market talk of a take-over bid for the company at 500 pence per share, traders said, with several of them naming Persimmon as a possible bidder. Both Redrow and Persimmon declined to comment. Persimmon shares rose 1.2 percent.
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