By Michael Taylor
LONDON, April 24 (Reuters) - Britain's leading shares
extended losses to dip 2 percent on Thursday as weakness in
banks weighed on the market, while economic concerns dragged on
heavyweight commodity stocks.
At 1056 GMT, the FTSE 100 edged down 125.6 points at 5,958.0
and was on track to notch up its largest one day fall in over
five weeks.
Overnight, U.S. stocks on Wall Street ended in positive
territory but off their session highs.
Banks and other financials swam in the sea of red for the
fourth session in a row as news of more writedowns and lower
profits hit the sector.
Barclays <BARC.L> fell 2.4 percent. The bank said profits in
the first quarter fell from a year earlier after its investment
bank and fund management arms were hit by tough financial market
conditions. []
Before the open, Credit Suisse <CSGN.VX> announced 5.3
billion Swiss francs ($5.26 billion) in credit-related
writedowns in the first quarter, causing a bigger-than-expected
loss, but said its core rich clients business was on track.
HBOS <HBOS.L> was down 2.8 percent, Alliance & Leicester
<ALLL.L> shed 1.7 percent, while Royal Bank of Scotland <RBS.L>
(RBS) was 4.6 percent lower.
Many traders now believe other UK banks will follow the lead
of RBS, which asked shareholders on Tuesday for 12 billion
pounds ($23.8 billion) to shore up its balance sheet.
"The financials are taking on the chin ... all follow
through from yesterday on Wall Street," said Tom Hougaard, chief
market strategist at City Index Markets. "It looks like the
second leg down has begun (after the bear market rally)."
Compounding the banks' woes, British fund firm Schroders
<SDR.L> lost 4.5 percent after it said first-quarter pretax
profit more than halved to 42.2 million pounds, hit by a
writedown of 33.5 million pounds on investments.
In commodities, a mixture of profit-taking and concerns over
the strength of the global economy sent mining and oil stocks
lower after recent hefty gains.
BHP Billiton <BLT.L>, Rio Tinto <RIO.L> and Anglo American
<AAL.L> were down between 4.6 and 4.9 percent. ENRC <ENRC.L>
lost 7 percent after ABN AMRO cut its rating on the stock to
"hold" from "buy".
Oil prices slipped below a record high of $118.30 a barrel
and BP <.BP.L> and Shell <RDSa.L> were down between 1.5 and 2.2
percent.
HOUSBUILDERS ON DODGY GROUND
Britain's biggest housebuilder by market value, Persimmon
<PSN.L>, was the standout FTSE 100 decliner.
Its shares fell 9.1 percent after it said sales in 2008 were
down 24 percent year on year and it expected the market to
become "more challenging" given buyers' concerns about the
credit crisis.
Rival Taylor Wimpey <TW.L> shed 10.1 percent and Barratt
Developments <BDEV.L> lost more than 14 percent as traders
pointed to market talk of a rights issue on the latter.
Barratt declined to comment.
"Overall, whilst (Persimmon) does not come as a complete
surprise -- declines in mortgage applications did provide early
warning -- the severity of management comments is likely to
provide a further shake to housing market confidence," said
Keith Bowman, an analyst at Hargreaves Lansdown Stockbrokers.
Reversing earlier gains, drugmaker AstraZeneca <AZN.L>
dipped 4.6 percent after the company nudged up its forecast for
2008 earnings, but sales of key products in the first quarter
were weaker than hoped for. []
Among the few gainers, mobile phone group Vodafone <VOD.L>
climbed 0.8 percent after it said it was linking up with China
Mobile <0941.HK> and Softbank <9984.T> to help accelerate the
commercial deployment of mobile Internet services.
(Additional reporting by Jason Benham and Dominic Lau; Editing
by Paul Bolding)
