London close: Footsie plummets to 5,393

4th Aug 2011 16:29

Hefty losses from large-cap equities dragged the Footsie over 3.43% lower on Thursday, a day after the blue chip index hit its lowest levels in 2011. Moderate falls turned into steep declines as the sell-off accelerated in the afternoon period, on the back of a bad start on Wall Street, which saw the three US benchmarks drop over 2% in early trade.The FTSE 100 plummeted, breaking through the technical support level of 5,500, to close at , its lowest level in nearly 11 months.Satellite operator Inmarsat was the worst performer of the day, losing over 20% of its market value after warning that "revenue growth in the first half has slowed and is unlikely to pick up in the second half as previously expected." Markets across Europe also tumbled on the outlook for the global economy, with an escalating Eurozone crisis and worries over a US downgrade playing on investors' minds. Combined with a recent slowdown in manufacturing in China, the uncertain outlook sparked a broad sell-off in the industrial metals and mining sector. Vedanta Resources fell 10.2%, while Xstrata, ENRC and Kazakhmys all registered losses of at least 8%.Rio Tinto was also lower after bearish comments about volatile economic conditions and rising prices in emerging economies took the gloss off a record set of first half earnings for the mining giant.Among the worst performers was banking giant Lloyds Banking Group, which fell over nearly 10% after the £3.2bn provision for potential claims relating to the mis-selling of PPI put a big hole in the bottom line. Sector peers Barclays and RBS were also heavily in the red. Meanwhile, head of the European Central Bank (ECB), Jean-Claude Trichet spoke of downside risks to economic growth that "may have intensified". Investors were speculating that the ECB would start buying up sovereign bonds today after Trichet said he wouldn't be surprised if there was intervention by end of the press conference he was giving. The remarks were made after the ECB left its benchmark lending rate at 1.5%.Additionally, there were no surprises from the Bank of England today as its Monetary Policy Committee (MPC) opted to keep interest rates at 0.5% and the quantitative easing (QE) programme unaltered at £200bn. Gold miner Randgold Resources was one of the four lone risers on the FTSE 100, after its second quarter gold production more than tripled, boosted by contributions from its new Tongon and Gounkoto mines and soaring gold prices. Strong growth in emerging markets helped Anglo-Dutch food and household goods giant Unilever posted higher sales and profits in the first half, though margins fell back as price rises failed to wholly offset the impact of higher input costs. Shares rose higher. BCFTSE 100 - RisersRandgold Resources Ltd. (RRS) 5,920.00p +6.57%Unilever (ULVR) 1,957.00p +2.73%Imperial Tobacco Group (IMT) 2,106.00p +1.25%Rexam (REX) 368.50p +0.14%FTSE 100 - FallersInmarsat (ISAT) 394.50p -19.31%Lloyds Banking Group (LLOY) 34.99p -10.19%Vedanta Resources (VED) 1,486.00p -9.39%Xstrata (XTA) 1,085.00p -8.52%Kazakhmys (KAZ) 1,099.00p -8.34%Glencore International (GLEN) 391.00p -8.29%Burberry Group (BRBY) 1,312.00p -8.06%Eurasian Natural Resources Corp. (ENRC) 663.00p -7.98%Barclays (BARC) 196.00p -7.76%Weir Group (WEIR) 1,860.00p -7.74%