Weir takes hit in fallout over US fears

SCOTTISH stocks continued to take a battering yesterday amid the wider market sell off, with Weir Group among the five biggest fallers in the Footsie.

The Glasgow-based engineering giant was dragged lower as mining stocks - which are among its big clients - dropped over concerns that the United States could slip back into recession, denting demand.

Weir fell 8.7 per cent or 151p to end the day at 1,580p. The stock has now lost 23.7 per cent of its value - or more than 1 billion - since posting record half-year profits last Tuesday.

Cairn Energy - which has lost about 960 million from its market cap over the same period - also took a further hit, down 5.9 per cent or 17.9p at 284.4p as the Edinburgh-based oil and gas explorer was caught up in the wider falls for oil stocks.

Brent crude dropped more than $3 to just above $106 a barrel over demand fears, dragging down Edinburgh-based Bowleven by 14.5p or 10.7 per cent to 120.5p, Aberdeen's Xcite Energy by 6.5p or 5.3 per cent lower to 115.5p and energy services firm Wood Group by 6.9 per cent or 38.5p to 517.5p.

Oil majors BP and Shell were among other heavyweight fallers in the wake of ratings agency Standard & Poor's decision to lower the US credit rating. Investors are concerned the first-ever US debt rating downgrade will batter already weakening consumer confidence and hurt economic growth. BP shares were 7.6p lower at 403p, while Shell dropped 35p to 1,890p.

The continuing sell-off sent investors racing for safe havens, with gold breaking through the $1,700-an-ounce barrier for the first time. Gold miner Randgold Resources was the only riser in the Footsie, up 425p or 7.4 per cent at 6,145p.

The broader Footsie was down 178.04 points or 3.4 per cent at 5,068.95, the first time since the index was created in 1984 that it has posted four consecutive days of triple-digit drops.

Last week the index shed nearly 10 per cent of its value and the new week had started with brief hopes of a revival after the European Central Bank (ECB) said it would intervene in the markets for Italian and Spanish bonds, helping to reduce borrowing costs in both countries. At one stage the top flight had gained more than 0.5 per cent.

The ECB's moves offered some early support for banks, although gains of more than 6 per cent were later lost as market sentiment turned negative.

Lloyds Banking Group remained little changed at 32.8p but Royal Bank of Scotland reversed to stand 0.9p lower at 27.3p, while Barclays was off 10.6p at 175.4p and HSBC dipped 19.3p to 537.8p.

Away from the market turmoil, shares in Argos- and Homebase-owner Home Retail Group rose 4.9p to 124.7p in the FTSE 250 index after Morgan Stanley upgraded the stock and said a recent sell-off looked to have gone too far.

Amid the sea of red across traders' screens, some investors are seeing buying opportunities. Dundee-based Alliance Trust revealed that Friday had brought a record day for its share dealing.Steve Latto, head of pensions at Alliance Trust Savings, said: "Many of our customers are showing confidence in the long-term value of equities despite current market volatility."