FTSE in the red for second day

London's top-flight share index ended a second day in the red in the wake of jitters on Wall Street that the boom in high growth and internet stocks may be overdone.

The FTSE 100 Index dropped by another 32 points to 6590
The FTSE 100 Index dropped by another 32 points to 6590

It continued a flight from risk across world markets that began last Friday when the tech-laden Nasdaq posted its biggest one-day loss since February.

The trend continued in Europe and on Wall Street at the start of the week, and the latest session saw the FTSE 100 Index down by another 32.2 points to 6590.7.

France's Cac 40 and German's Dax were also down but New York's Dow Jones Industrial Average was showing tentative gains by the time of the close in London.

On currency markets, sterling was boosted by official figures from the manufacturing sector showing its best year-on-year growth since 2011, boosting hopes of a balanced recovery for the UK economy.

There was more cheer as the International Monetary Fund issued another sharp upgrade on its forecast for Britain's gross domestic product prospects, predicting it would increase by 2.9% this year, up from a previous prediction of 2.4%.

The pound rose a cent against the greenback to 1.67 US dollars, and also climbed by a cent against the single currency to 1.21 euros.

But the brighter picture for the UK failed to shake the equities market from its torpor.

Alpari analyst Craig Erlam said: "One of the problems we have right now is the lack of any positive catalysts to override the fears that this sell-off is just the beginning of a broader correction."

The biggest faller in the top flight was Sports Direct International after it emerged that founder and majority shareholder Mike Ashley had sold another £200 million worth of shares in the retailer.

It came days after shareholders threw out an executive bonus scheme that would have awarded Mr Ashley £72 million in shares. The blue-chip stock plunged 9%, or 82.5p, to 811p.

Elsewhere, Barclays finished down 3.2p to 238.6p amid the global gloom, which also saw rivals Lloyds Banking Group shed 1.5p to 73.9p and HSBC fall 1.2p to 605p.

It also followed the disclosure that Barclays had agreed to a multi-million pound settlement in a legal case involving the alleged mis-selling of complex financial products to a care homes operator.

The case concerned interest rate swap arrangements based on Libor, the benchmark rate that had been manipulated by Barclays traders.

Shore Capital analyst Gary Greenwood said that by settling out of court, the bank could encourage other claims though "perhaps to a lesser extent than may have been the case if a court had ruled against Barclays".

In corporate news, shares in Hornby fell 1.2p to 79p after the toy firm said it was set to rack up annual losses of £1.2 million.

The biggest FTSE 100 risers were Standard Chartered, up 35.5p to 1290.5p, Unilever up 69p to 2606p, Rio Tinto up 83p to 3426.5p and Tullow Oil up 19.5 to 819.5p.

The biggest FTSE 100 fallers were Sports Direct, down 82.5p to 811p, Ashtead Group down 51.5p to 901p, St James's Place down 42.5p to 773p and Associated British Foods down 108p to 2645p.