THE FTSE 100 Index slid below the 6500 barrier yesterday as disappointing US economic indicators sent world markets into the red.

Stocks were also suffering across Europe, with the FTSE 100 down 39.8 points to 6489.7, having closed above 6500 on Monday for the first time in more than five years. But the top tier managed to secure its fifth week of successive gains, having finished last week at 6483.6.

Bank of England governor Sir Mervyn King said the UK currency was now properly valued. And the pound responded by climbing further.

In London equities, Royal Dutch Shell slipped 28p to 2240p after JPMorgan Cazenove cut its price target on the stock amid worries over the company’s growth potential.

And Morrisons reversed gains seen on Thursday after it announced a potential deal with Ocado to progress the supermarket’s online grocery operation.

Shares were close to the top of the fallers board, off 4.9p to 271.3p.

However, Ocado continued to rise on excitement over the prospect of closer ties with Morrisons.

Shares jumped 24 per cent on Thursday and were up another eight per cent, or 13.3p to 183.3p, today.

Elsewhere in the FTSE 250 Index, Rentokil Initial jumped nine per cent after it posted full-year results showing a better-than-expected ten per cent rise in profits to £191.1m.

While its City Link parcel delivery arm remains in the red, shares in the pest control and washrooms firm were 8.5p higher at 99p.

Pub chain JD Wetherspoon rose 5.5p to 515.5p despite revealing a 2.7 per cent fall in its half-year profits to £34.8m due to rising costs.

Investors were cheered as it maintained its recent sales improvement with a like-for-like rise of 7.3 per cent in the six weeks to March 10.