The UK benchmark index opened higher this morning at 3,529.37 after two days of massive losses but announcements of further corporate rights issues and dividend cuts dented investor confidence.
It was up on the previous session’s close of 3,512.09 and by 11am had gained 1.93 per cent to 3,580 but the strength of the rally remained unconvincing.
Set-backs came from South African insurer Old Mutual which announced it is axing dividends this year to cushion itself against future corporate bankruptcies.
By 11am shares in the company had dropped 1.87 per cent to 38.20p after falling to a low of 36.50p in earlier trades. By close, it was down 0.27 per cent to 37.40p.
Meanwhile broadcaster ITV announced it is cutting 600 jobs across its businesses after posting significant write-offs of £2.7bn in the value of its assets for 2008. Shares were down over 3 per cent to 23p by 11am after opening at 23.75p. It finished the day down 1.05 per cent at 23.50p.
Miners rallied strongly with hopes of a rebound in Chinese demand with a stimulus plan expected from the country’s policy makers tomorrow. Rio Tinto was up 7.84 per cent to 1,746p by in late-morning trades and by close of trade, it had finished up 14 per cent to 1,846p. BHP Billiton finished up over 12 per cent to 1,172p and Anglo American was up 11.66 per cent to 1,034p.