Market Wrap, Monday 15th September 2008

The FTSE 100 closed down 212.5 points at 5,204.2 today, whilst the FTSE 250 closed down 268.3 points at 8,708.4, and for those interested the FTSE Small Caps down 52.1 points at 2,747. It was all a reflection on the US bank news.

Over the pond, by the time London closed the DJI was down 276 points at 11,146, whilst the S&P500 down 27 points at 1,224, and the Nasdaq down 33 points at 2,228. The Lehman Brothers bankruptcy news had almost bgeen expected, but most assumed there would be a bail out. Lehman Brothers has apparently a total debt book of US$613bn, with total assets of US$639bn, according to the Chapter 11 filing papers filed yesterday. Merrill Lynch was taken over by Bank of America, which was a surprise. Massive deal, that, with the world's largest broking house now at BoA. AIG managed to secure a US$40 bln loan from the Federal Reserve, though, so they were helped out. Wall Street looks like falling some mkore.

Back here in London, the Bank of England tried to reassure the UK markets by saying that it is 'monitoring conditions' in the sterling money markets, and said it will 'act' to stabilise them if necessary. That didn't really help, to be truthful, with the banking stocks among the major casualties today. HBOS closed down 49.5p at 232.5p as it is far more reliant than any other UK bank on borrowing in the wholesale markets for its funding, meaning that with Lehman's going under the cost of funding could now rise again. Barclays closed down 34.5p at 316p despite showing some strength by being in the running to take over Lehman's, whilst RBS closed down over 29p at 210.5p, and Lloyds TSB down nearly 16p at 273.25p.

Staying in finance, the fund managers were also hit. Man Group closed down nearly 46p at just shy of 477p, whilst Schroders closed down 53.5p at 977.5p.

Also in financials, the insurance sector was hit, mainly due to the fall out from the hurricane Ike in the Gulf of Mexico, but also due to the AIG emergency $40 bln loan secured, causing some worries this side of the pond. Aviva close ddown 44p at 489.5p, whilst the Pru closed down 51p at a fiver-even, and Legal & General closed down 7.3p at 92.1p and Friends Provident down 17.6p to 81p.

On to oil, where the price of the black stuff was now back at US$96 bbl, a far cry from the speculative and dizzy heights of $147 bbl a couple of months ago. BP closed down 18.5p at 491.5p, RD Shell down 70p at 1,648p, whilst BG Group closed down 71p at 1,096p.

IOn contrast, those that use the stuff did well. British Airways closed up nearly 4p at 261.25p, whilst travel groups Thomas Cook closed up 4.75p at 255.5p, and TUI Travel up a penny at 239p. Meanwhile, cruise ship operator Carnival closed up 34p at 2,108p,

On to commodities of metallic properties, were the price of copper was down again, as too with lead, zinc and nickel. This was reflected in the miners, where BHP closed down 68p at 1,441p, Rio down 296p at 4,194p, Anto down over 34p at 493.25p, Kazakhmys down 121.5p at 780p, and Anglo down 93p at 2,409p.

The utilities did well, considering, with Centrica up 4.25p at 322p, whilst National Grid closed up a penny at 718p, Scottish & Southern Energy up 18p at 1,398p, and United Utilities up 5.5p at 694p.

On to the housebuilders, where Taylor Wimpey closed down 8.25p at 45.75p, Barratts down 11.25p at 134.25p, Persimmon down over 40p at 360p, and Bovis Homes down over 27p at just shy of 469p.

Capita had the best day on the board, closing up 17p at 719.5p.