FTSE falls on utilities price warning

The FTSE 100 slumped on opening this morning with utilities companies among the losers following Ofwat’s call for lower water bills.

The City's blue chip index was down 6.10 points (0.14%) to 4,487.63, as water and sewage-related firms struggled.

Water regulator Ofwat outlined proposals that would see the average water bill cut by £14 to £330 before inflation, between 2010 and 2015.

United Utilities Group has plunged 6.07% to 472p, while Severn Trent has fallen 4.58% to £10.62. Pennon Group is down 3.84% to 488p.

On the bright side, mining and resources firms have rallied, with Fresnillo up 3.98% to 613.5p. Xstrata has climbed 2.73% to 744.8p while Kazakhmys, Vedanta Resources and Rio Tinto have also made early gains.

The Dow Jones closed down 34.68 points (0.39%) to 8,881.26 after worrying results from Morgan Stanley.

The investment bank announced its net revenue fell 11% to $5.4bn in Q2, marking its third successive quarterly loss.

Coca-Cola Co was hit the hardest, down 2.52% to $49.13, while Boeing Co and Caterpillar Inc fell2.37% to $42.75 and 1.98% to $38.78 respectively.

Travelers Company was the biggest winner, up 1.6% to $41.36.