Markets: Few bright spots amid FTSE gloom

MEDICAL device maker Smith & Nephew was the stand-out stock in the FTSE 100 index yesterday after delighting dividend hunters by introducing a progressive payout policy.

The technology firm, which is also listed in New York, posted a slight fall in its second-­quarter profits and revenues, but cheered shareholders by cranking up its interim dividend by 50 per cent to nine cents.

Chief executive Olivier Bohuon unveiled a “step-change increase in the level of dividend pay-out and a move to a progressive dividend policy”.

But it was a rare spot of brightness in a sea of despair, with banking and mining stocks tumbling amid disappointment at a lack of action from the European Central Bank (ECB).

The FTSE 100 closed down 50.52 points, or 0.9 per cent, at 5,662.30, having risen during the morning session before plunging after the ECB announcement was made at about 1:30pm.

Banks were among the biggest losers, with Lloyds Banking Group down 4 per cent or 1.3p at 29.4p, and Barclays off 6p to 162.3p.

Royal Bank of Scotland was 5 per cent lower ahead of interim results this morning, which are expected to show that its recent IT meltdown and two mis-selling scandals have cost it about £300 million. Shares were 10.9p lower at 204.5p.

The biggest fallers came from the mining sector, with Vedanta Resources down 69p at 901.5p and Antofagasta off 57p at 1,041p.

NEW YORK: Global stocks and the euro tumbled yesterday after the ECB disappointed investors hoping for immediate action to combat the eurozone debt crisis. The US Federal Reserve took a similar wait-and-see approach on Wednesday.

The Dow Jones Industrial Average closed down 92.18 points, or 0.71 per cent, at 12,878.88. The Standard & Poor’s 500 Index fell 10.14 points, or 0.74 per cent, to 1,365.00.