Dealers braced as Footsie slips

Jane Padgham12 April 2012

LONDON shares slipped into the red today, reversing some of yesterday's dramatic gains after falls in Asian markets and volatile trading on Wall Street overnight.

The FTSE 100 index soon fell 67.7 points to 3898.2, with dealers braced for another torrid session.

'Non-tech companies will likely fare much better than techs but all in all we are expecting a difficult trading day just before the weekend,' said Tom Hougaard, chief market strategist at financial bookmaker City Index.

Investor sentiment was undermined by fresh concerns about the health of corporate America. Rating agencies stepped up financial pressure on energy trader Dynergy, pushing its credit rating deeper into junk territory, while rival Williams struggled to secure a $1bn loan (£662m).

Credit rating agency Moody's cut its outlook for JP Morgan Chase to negative from stable, warning that weakness in the asset quality of the bank's wholesale banking portfolio may lead to more credit problems and lower net income. The move is a fresh blow to the bank, which earlier this week was accused of covering up debts at Enron.

Tokyo's Nikkei 225 Average slumped 3.4% overnight while Korea's stock market plunged 3.5% and shares in Taiwan were down nearly 4%.

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