FTSE 100 falls, spooked by Hurricane Sandy

LONDON (Reuters) - The FTSE 100 opened lower on Monday, spooked by Hurricane Sandy which has already forced hundreds of thousands of people on the U.S. East Coast to flee their homes and has shut the U.S. stock market.

That added extra uncertainty to global financial markets already suffering from concerns about the health of the world economy and a relatively gloomy third quarter reporting season, which has so far seen a third of UK companies miss expectations.

Insurance companies were among the top falling blue chips, dragged down by prospects of hurricane claims, while heavy-weight energy stocks were dented by a drop in oil prices as the storm prompted refineries in the region to shut.

By 8.40 a.m. British Time, the FTSE 100 was down 23.92 points, or 0.4 percent at 5,782.79 points, closing in on a one-month intra-day low of 5,753.31 points set the previous session.

Sandy, which could become the largest storm to hit the U.S. mainland, headed for the country's most densely populated area, threatening destruction and flooding. That prompted the U.S. stock and options markets to be shut for a weather-related for the first time since 1985, likely also leading to thin volumes and thus volatile trading in Europe.

"It looked at the back of last week like markets were running out steam, the earnings were a drag ... Clearly this doesn't help. With the U.S. closed today it's another excuse for people not to do anything and we will get the obvious sectors marked down," said Ian Williams, strategist at Peel Hunt.

Shares in insurers Old Mutual, Admiral Group, Aviva and Prudential fell 1.3 to 0.8 percent, with the FTSE 350 non-life insurance sector down 1.8 percent. Heavyweight energy stocks, meanwhile, shaved 7 points off the UK benchmark index.

The hurricane was likely to delay some U.S. corporates from reporting earnings, giving markets fewer catalysts to trade on.

"The volumes are dire," said Steve Larkins, head of sales trading at Seymour Pierce, forecasting that the FTSE 100 could drift lower towards technical support around 5,850.

Only 4.7 percent of the average 90-day daily trading volumes has gone through in the first 45 minutes of activity, adding to already quiet conditions which have not really recovered from a traditional summer lull.

October is on track to be the third quietest month on the FTSE 100 this year for volumes, after July and August -- fresh bad news for the banking sector where lack of financial market activity has already hit earnings.

Trading updates from Barclays, Lloyds and RBS are due this week, with investors concerned about the likelihood of more provisions.

(Reporting By Toni Vorobyova. Editing by Jeremy Gaunt.)

Source: http://news.yahoo.com/ftse-falls-spooked-hurricane-sandy-080645361--finance.html

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