FTSE falls 1.8 percent on commodities and banks
The leading share index fell 1.8 percent early on Tuesday as persistent concerns over the impact of credit losses on financial institutions and unease over slowing economic growth hit global equities.
FTSE gains as metals spur minersBy 8:40 a.m., the FTSE 100 was down 99.6 points at 5,405.9, underperforming other major European indexes as the UK market was closed for holiday on Monday. The benchmark had rallied 2.5 percent on Friday.
"We have a reality check ... We still have got a serious credit crisis and a major banking crisis. All is not over by any stretch of imagination," said David Buik, strategist at BGC Partners.
"It seems the market is in denial that the effect of the banking and credit crisis is having on growth developments and profits. Until such time that the banks are in the position to quantify the losses and say 'that's it folks', the market is going to be like this."
Oil shares were the top-weighted loser on the index as crude prices hovered around $115 a barrel. BP, Royal Dutch Shell and gas producer BG Group shed 1.8 to 2.8 percent.
Energy services company John Wood Group slipped 2.7 percent despite posting a 44 percent rise in first-half profit and saying it expected to beat full-year expectations.
Miners also fell along with weaker metal prices. BHP Billiton, Anglo American, Lonmin, Vedanta Resources and Antofagasta declined 1.2 to 3.8 percent.
BANKS DOWN
Rio Tinto reported a 55 percent rise in first-half earnings, boosted by its takeover of Alcan last year and record iron ore production feeding Chinese demand.
Rio shares were down 2.5 percent.
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