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Last updateMon, 18 Nov 2019 9am

FTSE live: market report - as it happened September 5

It was a familiar tale of woe on London’s bourse, with banks and heavyweight miners leading the benchmark index deep into the red.

But while it has more often than not been the spectre of sovereign debt dragging on the banks, the eurozone was playing second fiddle to America as investors focused on events on the other side of the Atlantic.

 

Although traders were rattled by yields on Italian bonds again heading north, they were more concerned with a US regulator on Friday suing 17 large banks and financial institutions over losses on sub-prime bonds.

Fears over possible exposure amongst British banks sent lenders tumbling, with Royal Bank of Scotland suffering the sharpest fall, plunging 3.06 to 21.78p while Lloyds Banking Group dropped 2.47 to 30.65p and Barclays shed 11.05 to 154.15p.

Despite the recent slide in banking shares, analysts at Bank of America-Merill Lynch were staying positive on the UK banks, naming Barclays as their “top pick” and telling investors that “patience” was required.

Merrill’s support did not help the lenders, though, and with banks leading the retreat, the FTSE 100 was dragged down 189.45 points to 5102.58 while the FTSE 250 tumbled 296.91 points to 10084.11.

12.35: UBS cuts stance on global equities

As disappointing services sector data from China, the UK and the rest of Europe weighs on equities, analysts have been taking a red pen to their equity recommendations.

Analysts at UBS have cut their rating on global equities to "underweight" given "deteriorating conditions". The broker said:

Quote In recent weeks, two developments have shaken market confidence. First, growth has deteriorated in the US and Europe. Indeed, purchasing managers’ surveys moved lower and nonfarm payroll data in the US suggest softer labor conditions. Meanwhile, the sovereign debt crisis in Europe has taken a turn for the worse, suggesting continued challenges in those markets.

Commenting on inividual sectors, analysts added:

Quote Macro conditions suggest elevated volatility is apt to persist. As long as this is the case, valuations alone won’t be enough to drive market upside. As a result, we move to Underweight in Financials and Materials and move Consumer Staples to Neutral. Our overweight allocations remain Tech, Healthcare, and Telcos.

Currently, the FTSE 100 is down 116 points to 5175 and the FTSE 250 has lost 233 points to 10147.

11.10am: Berkeley defies gloom as market slips further into red

While the wider market is heavily in the red, Berkeley has bucked the trend, ticking up 3pc. Lifting the London-focused builder and developer is news that it is set to hit a profit target two years earlier than expected due to more buoyant conditions since May last year.

The FTSE 250 group said last year that it was aiming to double pre-tax profit within five years as well as lift the margin in its land bank. Berkeley's chairman, Tom Pidgley, said today that the board believes it is now in a position to achieve that target at least two years earlier than originally anticipated.

Berkeley's rise aside, the FTSE 250 is down 233 points to 10147 and the FTSE 100 has fallen 103 points to 5188.

8.35am: FTSE extends decline after Friday's disappointing US jobs data

London's leading shares fell heavily on Monday as worries over recession in US after Friday's jobs data and continuing doubts over the eurozone debt crisis.

The FTSE 100 tumbled from the start and was down 97.25 - or 1.9pc - 5191.42 at 8.19am.

Banking stocks continued to lead the fallers, weighed down by worries regarding next week's report from the Independent Commission on Banking as well as litigation by the US Government over missold subprime mortgages.

Royal Bank of Scotland, HSBC and Barclays have been named in litigation brought by the US Government to recoup the billions Fannie Mae and Freddie Mac spent on mortgage-backed securities in the lead-up to the financial crisis.

RBS, which is facing action over $30.4bn (£18.7bn) of sales shares, tumbled 7.89pc. Barclays lost 6.7pc, while HSBC fell 1.2pc. Lloyds Banking Group dropped 4.2pc.

Growing fears over a global slowdown knocked miners. Antofagasta, Kazakhmys, and Xstrata fell between 3.5pc and 3.1pc.

Randgold Resources was the only riser - Up 0.22 - as gold rose $5 to $1,888 an ounce.

06.45 Asian shares drop sharply

Asian stock markets took a beating on Monday after US companies stopped hiring in August, reviving fears that the world's largest economy is heading back into recession.

Japan's Nikkei 225 stock average closed down 1.86pc at 8,784.46 with sentiment also undermined by the persistent strength of the yen against the dollar, which hurts exporters.

Australia's S&P/ASX 200 fell 2.4pc to 4,141.90 and South Korea's Kospi slid 4.4pc to 1,785.83. Hong Kong's Hang Seng dropped 2.87pc to 19,634.91.

Companies that particularly count on brisk economic growth to fuel their revenues were hit hard. Japan's Hitachi Construction Machinery plunged 5pc.

Investors were sticking to the sidelines as expectations mounted that the US Federal Reserve would take action at its September meeting to support the economy - perhaps a third round of bond purchases, dubbed quantitative easing III or QE3, analysts said.

Linus Yip, a strategist at First Shanghai Securities in Hong Kong:

Quote Right now the possibility has increased. I think they have to do something. The markets are expecting QE3.

The Dow Jones industrial average closed 2.2pc lower Friday, wiping out its gain for the week, on the heels of the Labor Department reported that no jobs were added in the US in August.

It was the worst employment report in 11 months and renewed fears that another recession could be on the way.

The lack of hiring in the US last month surprised investors. Economists were expecting 93,000 jobs to be added.

The jobs crisis has led President Barack Obama to schedule a major speech Thursday night to propose steps to stimulate hiring.

The sour jobs report came on top of Europe's debt problems, which are still dragging on. Meanwhile, China's economy is showing signs of slower growth.

London's blue chips also fell on Friday after the US jobs data.

The FTSE 100 tumbled 126.62 points to 5292.03 - although still ended the week up 3.2pc.

Today, oil prices extended losses to below $86 a barrel as the dismal jobs report suggested that a weak US economy will lessen demand for crude. The dollar was higher against the yen and the euro.