Stock market report: Tuesday close
The FTSE 100 index slid more than 1% into the red today as investors nervously eyed a negative start on Wall Street.
Happy day: Will the FTSE continue to gain?
US stocks opened lower, with the Dow Jones slipping 13 points to 7762 by lunchtime in New York, as investors paused for breath. The Dow posted its fifth biggest rise in history yesterday. The Footsie closed down 43.29 points at 3909.52.
The US market jumped 6.8% on Monday in the wake of the US Government's toxic asset scheme for banks, fuelling hopes that US financials had taken another step on their long road to recovery. This also caused the Footsie to surge 2.9% on Monday.
A surprise jump in the rate of UK inflation failed to lift the mood in London as the Footsie languished below the key 4,000 barrier.
Figures from the Office for National Statistics (ONS) confounded analysts' expectations, showing the Consumer Prices Index rose unexpectedly from 3% in January to 3.2%, while the Retail Prices Index slowed to zero rather than the minus 0.7% forecast by some analysts.
The data prompted a sharp rise in the value of sterling against both the euro and the dollar.
Retailers also saw rises in the wake of the inflation figures after the industry was shown to have passed on higher import costs incurred because of the weakness in sterling.
High street clothing firm Next and B&Q owner Kingfisher were both on the risers' board ahead of their final results announcements on Thursday, with 4% and 3% gains respectively. Next rose 35p to 1318p, while Kingfisher was up 1.7p at 140.8p.
Banks, which had been risers in early trading on the back of the new US scheme, saw their shares fall, with HSBC climbing the fallers' board losing 6%, or 26.50p, at 391.25p.
Lloyds Banking Group also fell into the red, down 5.7%, or 3.5p, at 58p after early gains and Barclays lost 3.7p to 117.8p.
But Royal Bank of Scotland bucked the trend, remaining on the leader board with a 1.6% loss or 0.4p to 25.4p.
• Share tips from Anthony Bolton's protégé
Mining stocks put the market under pressure, occupying three of the first four places of the fallers' board. Antofagasta led the way with a drop of 8% or 45p at 516p while Anglo American, which was said to be looking at possible iron ore joint ventures or acquisition opportunities in Australia, was down 91p at 1275p.
Rio Tinto said its proposed deal with Chinese state-owned Chinalco would not influence iron ore contract price negotiations for the year ahead. Its share closed down 51p at 2241p.
BT Group was said to be set to roll out its superfast broadband network to six UK cities by 2010 after ending a stand-off with Ofcom over how to regulate the service. The shares were off 0.2p at 82.6p.
Centrica, which is offering 725p a share for Venture Production in which it owns a 22% stake, fell 6.25p to 236.75p despite Citigroup trimming its target from 285p to 265p to reflect a weaker short-term profit outlook as underlined by full-year results for 2008.
In the FTSE 250 index, a broker upgrade meant Northern Foods gained for a second successive session, up 4.5p at 44p. UBS raised Northern Foods from neutral to buy with a target of 61p ahead of Thursday's fourth-quarter trading update.
And for tomorrow...
J Sainsbury is tipped to post a robust a fourth-quarter trading update tomorrow. Chief executive Justin King has revived the group, and it has so far shrugged off analysts' concerns it will lose market share as shoppers trade down to its budget rivals. Broker Citigroup expects a 6.5% jump in like-for-like sales.
Finals: Henry Boot, Legal & General, Pinewood Shepperton, RAB Capital, Severfield-Rowen, Signet, Ted Baker
Interims: Smiths
Trading updates: Imperial Tobacco, Sainsbury's, TUI Travel
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