Worst quarter since ’02 ends 14% down

FRESH fears of a global recession pushed London’s top shares index down more than 1.3 per cent yesterday, capping off its worst quarter for nine years.

The FTSE 100 index fell 68.36 points to 5,128.48 after worrying Chinese and US economic data added to concerns about a potential Greek default.

The fall means London’s blue chip shares have fallen 13.7 per cent in the third quarter of 2011 – its worst performance since 2002 when the dot-com boom ended. The UK’s biggest companies have had some £212 billion wiped off their value in the past three months.

Ben Critchley, sales trader at IG Index, said: “Any hope the quarter would end with a flourish was decimated with another day of broad-based selling in London. Screens may have been awash with red as a result but there are one or two bright notes – Fresnillo has fared the best of the minerals metals prices staged something of a recovery.”

Silver miner Fresnillo closed up 72p at 1,586p, while gold miner Randgold Resources was 160p ahead at 6,290p.

Poor data from America added to London’s gloom after the US commerce department said incomes fell in August for the first time in nearly two year. The Dow Jones Industrial Average was down 0.5 per cent by the time the London market closed.

Investors remained nervous about developments in the eurozone as Greek prime minister George Papandreou pressed European leaders, including French president Nicolas Sarkozy, to release the next €8 billion (£7bn) bailout instalment for his country to save it from default.

The uncertainty heightened when striking civil servants forced debt inspectors in Athens to postpone talks to decide whether Greece is making enough progress with its austerity measures.

The pound was up at €1.16 against the euro after the single currency was hit by weak retail sales figures in its biggest economy, Germany. Sterling was also up at $1.56 against the dollar.

Fears about a Greek default continued to hit the banking sector with Barclays down 5 per cent or 7.8p at 161.4p, HSBC down 15.9p at 496.9p, Royal Bank of Scotland off 1p at 23.5p, and Lloyds 1.6p lower at 34.9p.

Burberry was among the fallers, down 27p at 1,174p as continued fears over the health of the Chinese economy hit luxury stocks across the globe.

Elsewhere, shares in pharmaceutical giant AstraZeneca fell despite the firm agreeing a settlement with a rival over selling a form of its Seroquel anti-psychotic drug in the US. Shares were down 6.5p at 2,868p.

Outside the top flight, defence firm Qinetiq said US military sales had driven a better-than-expected performance in the first half of the year. Shares rose 3 per cent, or 3p to 116.7p.

Among the Scottish stocks, Scottish & Southern Energy fell 11p to 1,295p after the Perth-based utilities firm reiterated July’s warning that half-year profits will be lower than last year.

Moodiesburn-based sausage skin maker Devro slid 3.1p to 235.1p despite renewing its £51 million bank overdraft.

Celtic non-executive director Brian Duffy completed a hat-trick of purchases for September by snapping up 50,779 shares at 40p each, taking his holding to 229,694. Celtic closed flat at 39p.