Economy
FTSE falls as eathquake in Japan hits sentiment
Updated: 2011-04-08 00:30
(Agencies)
LONDON- Britain's top share index fell on Thursday after a second large earthquake to strike Japan within a month knocked investor confidence, with traders wary of further losses once Asian markets open.
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"Investors have fled risk immediately and it will be interesting to see how Asian markets react overnight as more news filters through, that could have a large bearing on how we open tomorrow," a London-based trader said.
Risk sensitive miners and integrated oils were the biggest weights on the index, while the biggest FTSE 100 rise was temporary power supplier Aggreko, which offered its services to Japan following March's quake. The stock closed up 1.4 percent.
Brent crude pared losses, edging back towards multi-year highs. But strategists said global growth remained on track despite worries over the economic impact of higher oil prices.
"The base case of robust global economic growth remains intact but uncertainty and downside risks have considerably increased on the back of the shifting nature of the oil shock," Koen Straetmans, senior investment strategist at ING IM, said.
Vedanta Resources and Cairn Energy fell 2.6 percent and 2.3 percent respectively after they extended the deadline for a $9.6 billion acquisition of Cairn's Indian assets, a day after the Indian government deferred a decision on the deal.
"Although clearly a disappointment and likely to result in some further weakness, the deal is not yet dead," brokerage Collins Stewart said in a note on Cairn Energy.
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