MONDAY MARKET CLOSE: Heavy fallers add to wider FTSE woes

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Negative news from heavyweights BG Group and Vodafone ensured the FTSE 100 was one of the worst performers amid the ongoing rout on world markets.

The slump by the blue-chip pair wiped as much as 50 points from the benchmark index, which fell by more than other European markets to finish 113.08 points or 1.7 per cent lower at a five-week low of 6,550.66.

The decline was on top of a loss of 100 points on Friday after a plunge in the value of Argentina’s currency sparked fears of a new emerging markets rout.

Anxiety is building over what might happen if the US Federal Reserve later this week stages a further withdrawal of the monetary support pouring billions every month into the world’s biggest economy. Availability of easy money in the US has seen investors ploughing cash into fast-growing emerging markets to seek better returns so there is concern over what will happen to these economies when the taps are turned off.

But Brenda Kelly, senior market strategist at IG, said shares had risen too far, too fast.

“A correction to the downside was inevitable and is, in many respects, healthy,” she said.

Meanwhile BG fell almost 14 per cent, down 173p at 1,082p after it downgraded its earnings guidance for this year and next. And Vodafone slid 4 per cent or 9p to 223.5p after AT&T dismissed speculation linking it to a potential £60 billion takeover approach for the UK company.

Other fallers included Royal Bank of Scotland after its admission late in the session that it will have to set aside about £3bn in additional funds to cover litigation and customer compensation claims. Shares were 7.5p lower at 332.2p, a drop of 2 per cent, even as it sweetened the pill by saying a raft of executives would forego their bonuses.