Panic selling is the order of the day

A DAY of panic selling on the world markets knocked 1.5 per cent off the value of blue chip London stocks yesterday, with few companies being spared.

Scottish heavyweights Aggreko and Standard Life both took big hits despite posting good results as the FTSE dived 92 points to 5,845.29 - mirroring falls also seen across Europe and America.

Will Hedden, sales trader at IG Index, said: "Panic was widespread as there was a worry that 'the correction cometh'.

"Unsurprisingly, the UK market did not escape the blood bath and the FTSE 100 was trending downwards all day."

The pound dropped against most major currencies, including a weaker euro, after UK interest rates were kept on hold once more, maintained at the emergency low of 0.5 per cent despite soaring inflation. Sterling fell to $1.61 and €1.16.

Traders' gaze drifted from the ongoing concerns over the Libyan crisis and oil prices eased. Brent crude dropped more than 1 per cent to $114.5 a barrel, while US crude for April delivery declined nearly 2 per cent to $102.37.

Spain's rating woes on being downgraded by Moody's hit banking stocks, with Barclays, which is heavily exposed to the Iberian peninsula, down 4.1p at 301.4p and Royal Bank of Scotland dropping 1p to 43p.

Unexpected disappointment from China's latest trade and export figures hit metal prices and left miners deep in the red. Fresnillo led the sector's declines, off 76p to 1,513p.

Investors were also shaken by a profits warning from Home Retail Group after the Argos owner admitted trading conditions were "more difficult and volatile" than it had expected. Shares in the FTSE 250 group fell 6 per cent or 12.4p to 198.5p.

Other retailers suffered in the top flight, with B&Q owner Kingfisher, down 4.6p at 240p and Marks & Spencer off 0.9p at 340p.

Life and pensions firm Standard Life was a heavy faller despite posting a 7 per cent hike in 2010 profits and confirming UK sales up "strongly" in the first two months of 2011 so far. Shares were down 7.3 per cent 17.8p at 226.9p.

Temporary power supplier Aggreko reported that pre-tax profits jumped 24.6 per cent to 307.1 million last year, a record performance, but saw its share price fall 6.6 per cent or 99p to 1,390, despite announcing a 50 per cent increase in its dividend.

Supermarket Morrisons enjoyed a better session, up 2 per cent or 4.5p to 285p, after it revealed long-awaited plans to launch an online shopping operation and posted a 13 per cent increase in annual profits.

There was also good news from the pub sector after Chef & Brewer owner Punch Taverns reported a bigger-than-expected rise in second quarter sales.Shares were 4.5p higher at 75.5p, a gain of 6 per cent.

This helped FTSE 250 rival Enterprise Inns rise 1 per cent, up 0.7p to 89.3p, with JD Wetherspoon also 9.1p higher at 430.9p ahead of figures tomorrow.

Other Scottish stocks in the firing line yesterday included Indigovision, which fell 10.8 per cent or 60p to 495p, despite reporting a 15 per cent rise in operating profit.

Weir Group lost 4.5 per cent or 77p to 1,615 in the general carnage.