Luxury goods and raw materials suffer as slump continues for fifth day

FTSE: 5,695.28 (-79.96) Mid-250: 11,151.20 (-198.43) Small Cap: 3,112.95 (-76.41)STOCKS SLUMPED in London for a fifth day yesterday, tracking declines in global equity markets, amid concern that a Japanese nuclear power plant will leak radiation.

Burberry led European luxury brand stocks lower on concern that sales in Japan may suffer following the country’s strongest earthquake on record.

Antofagasta, Vedanta Resources and Rio Tinto Group paced losses among raw material producers. The benchmark FTSE 100 Index retreated 79.96, or 1.4 per cent, to 5,695.28.

It has tumbled 6.5 per cent from last month’s high amid concern that higher oil prices prompted by Arab revolts will curb global economic growth and as Japan’s prime minister Naoto Kan said the danger of further radiation leaks from the earthquake-damaged Fukushima plant is increasing.

“Sellers are pushing against an open door,” said Richard Hunter, the London-based head of equities at Hargreaves Lansdown. “What’s happening in Japan is just the latest in a long list of concerns that investors are having to deal with.

“It’s a very uncertain situation.”

Burberry retreated 1.2 per cent to 1,110 pence, extending yesterday’s 4.3 per cent drop. Antofagasta lost 1.7 per cent to 1,309 pence, Vedanta declined 1.2 per cent to 2,203 pence and Rio Tinto slid 1 per cent to 3,935 pence.

Copper, nickel, tin and lead prices dropped on the London Metal Exchange.

International Consolidated Airlines Group, the parent company of British Airways, sank 4 per cent to 220.7 pence, the lowest level since September.

German rival Lufthansa rerouted its Tokyo flights to the southern Japanese cities of Nagoya and Osaka, citing the risk of nuclear fallout and aftershocks.

Close Brothers Group sank 2.4 per cent to 840 pence.

The British investment bank, which was founded in 1878, said fiscal first-half profit fell 68 per cent after it wrote down the value of a fund administration unit it sold.

Hansen Transmissions, whose products are used in wind generators, water treatment and cooling towers, rallied 6 per cent to 46.91 pence, the most since October.

Meanwhile, the pound sank 0.6 per cent to $1.6073 after sliding as much as 1.2 per cent. Against the euro, sterling was 0.5 per cent lower at 86.92 pence, the weakest since November last. – (Bloomberg)