FTSE 100 close: US nerves put skids under Footsie
The Footsie took a sudden dive this afternoon after US stocks fell on the open.
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The release of some worse-than-expected US consumer confidence figures saw the Dow Jones open 92.9 points down at 8,436.5.
And that undermined UK stocks, with the FTSE 100 index - having stayed close to its opening level all day - closing 44.8 points down at 4,249.2.
The Footsie has rallied from its lows in March, but still remains below its opening mark for the year as worries over the pace of economic recovery have caused a stuttering performance in recent weeks. Those concerns were brought home by official figures today showing a 2.4% slump in first quarter GDP - the worst rate since 1958.
'Once again we've seen the green shoots arguments shot down,' said David Fineberg, Head of Trading Western at CMC Markets. 'UK GDP this morning was certainly less than upbeat but the Chicago PMI reading looked as if it might help equities finish the month on a high.
'This shift in outlook is also hammering oil prices - crude is back below $70 a barrel and the petrochemicals sector is struggling too whilst the shift in sentiment is unsurprisingly weighing on the banks as well.
'So in summary, this falling consumer demand is painting a rather bleak picture.'
Financial stocks were vulnerable - probably down to profit-taking after gains made yesterday - with Prudential losing 9.25p to 413.5p and Asian-facing bank Standard Chartered 35p lower at 1,1402p. Fund manager Schroders lost 26p to 820.5p, while rival hedge fund Man Group was 8.5p at 277.5p.
British Airways was in the red with a 2.8p fall to 124.7p as reports suggested crucial talks with unions aimed at reaching agreement on cost cutting appeared to be heading for a breakdown.
Food producers Cadbury and Unilever retreated as investors positioned themselves for the new quarter, the stocks losing 9p to 518p and 33p to 1,424p respectively.
Utilities were also unsettled by negative broker comment: United Utilities fell 11.6p to 497p as JP Morgan cut its rating to 'neutral' from 'overweight' in a sector review.
The broker also cut its target price for Severn Trent, down 24p to 1,094p.
The transport sector was once more in the spotlight after Arriva warned revenues from its CrossCountry franchise were under pressure. Shares fell more than 3%, or 16p to 406p, but in contrast shares in National Express saw another near 2% rise, up 6.75p to 309.5p, after FirstGroup yesterday confirmed its takeover interest in the rail and coach operator.
The housebuilding sector was given a lift after the Nationwide said prices rose for the third time in four months during June. This was enough to lift Taylor Wimpey by 0.25p to 33.5p and Barratt Developments by 0.5p to 147.5p.
Wolseley was the top blue-chip riser, up 32p to 1,158p, as investors responded positively to a change of chief executive at the plumbing supplies firm.
Carpetright failed to benefit from the better consumer sentiment as the floor coverings firm reported annual results at the bottom of market expectations. Shares dipped 6% or 37p to 561p after the company also revealed a sharp cut in its full-year dividend.
Directories firm Yell was the biggest faller in the FTSE 250 index after it forecast another grim quarter of trading and said it was in talks with lenders about refinancing its £3.5bn debt pile. There were no details on the plans, but the City was pessimistic about the potential impact on investors as shares tumbled 15% or 4.5p to 26.25p.
Also in the second tier, retail chain HMV saw shares fall 6p to 112.75p despite reporting pre-tax profits for the year to 25 April up 11.5% at £63m, slightly ahead of consensus forecasts.
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