GM decline drags down FTSE

The FTSE 100 Index closed up 30.4 points at 4417.9

A mood of caution returned to the London market after the FTSE 100 Index followed Wall Street lower in the first hour of trading.

Analysts blamed the decline on the looming bankruptcy of car giant General Motors and the belief that recent optimism over an economic recovery had gone too far.

The Dow Jones Industrial Average shed 2% Wednesday night, while in London the Footsie was 1% or 48.7 points lower at 4367.5.

A mixture of stocks were dragged lower by the poor sentiment, including British Land after a fall of 12p to 392.25p.

Prudential slipped 12.5p to 425.75p, while National Grid was 13p lower at 603p.

Financial services group Man was the leading faller, off 10% or 25p to 225p after it announced a 64% fall in full-year profits and said funds under management had declined since its last update in March.

This raised fears about its 2010 performance, even though results were ahead of hopes.

Building supplies firm Wolseley was another heavy faller after chief executive Chip Hornsby reported a near 90% fall in profits and said trading conditions were likely to remain tough for some time. Shares fell 12% or 143p to 1085p.