THE FTSE ended deep in negative territory as figures suggesting the UK is on the cusp of a technical recession wiped out a positive start to the week.

The FTSE closed down 179.6 points at 3,883.4 on Friday after it was revealed the UK economy slowed for the first time in 16 years between July and September. Almost GBP 49bn was wiped off the value of blue chip companies as the markets accepted that recession is now no longer a possibility but a near certainty.

There were also mounting concerns over the health of emerging economies - in particular China. The International Monetary Fund announced it may soon add Belarus to the list of smaller economies it has been forced to bail out.

As a result, Standard Chartered and HSBC, which until this week were thought to be relatively insulated from the economic meltdown due to their global spread, were among the week's biggest fallers. HSBC ended down 13 per cent at 696p, while Standard Chartered lost a staggering 30 per cent, closing at 758p.

The oil companies will take centre stage this week with updates from energy giants BP and Shell. Investors will be looking for signs of how the oil price, which has rapidly halved since peaking at dollars 147 a barrel in July, is affecting both companies' bottom line.

Citywatchers will scrutinise quarterly subscriber figures from the broadcast giant BSkyB on Friday for evidence of how the media sector's fortunes will play out in the recession.

In July, BSkyB, part of the Murdoch empire, posted a better-than- expected increase in net customer additions in its fourth quarter, suggesting consumers are opting to stay at home and spend what little cash they have on home entertainment.

But a report from Continental Research published last week warned that homeowners may in fact cut their spending on satellite and cable TV over the next few months as they tighten their belts.

According to Sam Hart, media analyst at Charles Stanley stockbrokers, the consumer slowdown will continue to cast doubt over BSkyB's share price in the coming weeks. They have lost more than 10 per cent of their value so far this month, closing at 334.94p on Friday.

"BSkyB is amongst the more defensive media companies, but concerns over regulatory issues, the consumer outlook and renegotiation of the Premier League contract in 2009 are likely to overhang the shares," he said.

Hart forecasts pay-TV subscriber numbers will have increased by a net 55,000 in the first quarter of the company's financial year to 9.4 million.

Shareholders will also be keen to hear any update on BSkyB's stake in ITV after the Competition Appeal Tribunal recently said it must reduce its stake from 17.9 per cent to 7.5 per cent. Although there is talk that management is considering a legal challenge, the firm is expected to write down the value of the stake to reflect the fall in ITV's share price. ITV shares are currently trading at 27.75p, a fall of 65.75 per cent since January.

Unilever shareholders are hoping for a more positive update from the consumer goods giant on Thursday, after its last update revealed a 2.9 per cent drop in European sales volumes in the second quarter.

But Charles Stanley analyst Jeremy Batstone-Carr suggests they might again be disappointed. He is forecasting a fall of 15.5 per cent in underlying gross margins, although sales figures might make for slightly better reading, with the City pointing to a 7.1 per cent increase in the three months to the end of November.

Week ahead

TOMORROW

Reckitt Benckiser (Q3), Wolfson Microelectronics (Q3) (interims);

TUESDAY

ARM Holdings (Q3), BP (Q3), Arriva, Aviva, Carpetright (trading updates)

WEDNESDAY

Shire (Q3) (interims); Standard Life (trading update); Photo-Me International (AGM)

THURSDAY

AstraZeneca (Q3), BAT (Q3), Luminar, Royal Dutch Shell (Q3), Unilever (Q3) (interims); WPP (trading update)

FRIDAY

Blacks Leisure, BSkyB (Q1) (interims); Forth Ports, Friends Provident, Spectris (trading updates)

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