Market Morning

FTSE 100 hit by banks to close 5 pct lower

Britain's blue-chip shares tumbled 5 percent to their lowest close in over a month on Wednesday led by financials which were thumped on anxiety over their balance sheets. British equities, already deep in the red in morning trade, fell further to mirror a slide on Wall Street after data showed that U.S. consumers cut their spending even more sharply than expected. The FTSE 100 closed down 218.51 points at 4,180.64, falling for its sixth straight session to its lowest closing level since December 5. The UK benchmark is down 5.8 percent so far this month and fell more than 31 percent last year, its worst annual drop since its launch in 1984. Mining shares were also heavy losers, denting the market as metal prices fell on slowing demand concerns. Rio Tinto, Xtsrata, Anglo-American, BHP Billiton, Antofagasta, Kazakhmys and Eurasian fell between 6.6 and 11.7 percent.

US Stocks Drop As Financials Deteriorate

U.S. stocks plunge as more losses and upheaval in the banking sector, along with dire trade and retail data, hint at an economy at risk of a deflationary spiral. The Dow Jones Industrial Average is down more than 270 points, or 3.2%, with all of its components in the red. Citigroup is off 16%.

Oil Falls

Oil fell on Wednesday due to rising inventories and flagging demand in top consumer the United States. U.S. distillate demand fell to the lowest level in five years as the economic recession battered industrial consumption, according to the Energy Information Administration. Inventories of the fuel -- which includes heating oil and diesel -- surged by 6.4 million barrels in the week to January 9, while gasoline and crude stocks likewise rose, the EIA reported. U.S. crude settled down 50 cents at $37.28 a barrel. London Brent crude -- which has been supported by the disruption of Russian gas supplies to Europe -- rose 25 cents to $45.08 a barrel.