London-listed shares fell further into the red in opening deals on Tuesday and continued their downward trend almost to the closing bell, with a 250-point drop on the Dow Jones Industrial Average weighing further in afternoon trade.
The FTSE 100 index lost 85 points over the session, closing 1.4% weaker at 5,798; the FTSE 250 index shed 149 points or 1.2% to settle at 11,891.
London-listed shares fell further into the red in opening deals on Tuesday and continued their downward trend almost to the closing bell.
The trigger for the broad-based sell-off, which impacted markets in the UK, on the Continent and across the pond in the US, was another round of weak earnings reports from American corporations. 3M (MMM), DuPont (DFT) and United Technologies (UTX) were among those companies that slashes their profit forecasts. On Monday, Caterpillar (CAT) was the bringer of disappointment, while last week a whole host of industry bellwethers failed to please investors.
In the UK, new figures from the Office for National Statistics revealed people's buying power has been squeezed more in since the financial crisis than in either of the country's previous two recessions.
National income per head accounting for inflation has dropped more than 13% since the start of 2008, outpacing the falls seen in the four years following the 1979 oil shock and the same period after the recession of the early '90s.
With the exception of three standout stocks, the FTSE 100 resembled something of a blood bath by close of business, with little discretion exercised amongst the sell instructions. Kazakhmys (KAZ) was the main casualty, dropping 4.6%, while fellow Kazakh resources stock Eurasian Natural Resources (ENRC) lost 3.8%.
Among the risers, ARM Holdings (ARM) was the clear winner, surging 7.7% as it bucked the trend for weak earnings news and instead reported solid third-quarter results and "gave investors a relatively bright outlook for the rest of calendar 2012," Morningstar Brian Colello said. Colello will maintain his fair value estimate for ARM.
Experian (EXPN) also excelled, climbing 3.8% on the back of news it is proposing to invest £1.5 billion to take full control of its Brazil unit Serasa.
On the FTSE 250, Chemring (CHG) came off worst, slumping 9.1% on the negative indsutry sentiment following peer DuPont's results.
