FTSE close: Essar, miners lower; Capita up

By Ed Monk for Thisismoney.co.uk
Updated: 12:14 EDT, 28 January 2011

17.10 (close)

Friday feeling: Shares are waiting for US GDP data.

The London market took little cheer from positive economic growth figures in the US today as slipping metal prices weighed on mining stocks.

The US Bureau of Economic Analysis said GDP grew at an annualised rate of 3.2% between October and December, which was up on the annual rate of 2.6% in the previous quarter. The US economy grew by 2.9% in the whole of 2010, which is the strongest year of growth since 2005.

But the FTSE 100 Index closed 83.7 points down at 5881.4, hit by losses in the weighty mining sector as sliding metal prices saw Vedanta Resources lose 109p at 2291p, Anglo American slip 112p at 3031p and Rio Tinto drop 132.5p at 4281.5p.

The US figures strengthened the dollar, which was up agains the pound at 1.58. However, sterling was up against the euro at 1.16.

A drop in oil prices saw the energy sector take a hit, with Essar Energy hitting the top of the fallers' board, losing nearly 6% or 30.5p at 512.5p, while Petrofac shed 61p at 1551p and BG Group lost 58p at 1334p.

Sentiment was not helped by a gloomy consumer confidence survey from market research firm GfK NOP.

The study revealed the biggest drop in consumer confidence in nearly 20 years between December and January as Britons faced up to the reality of higher VAT and public spending cuts.

Shares in TUI Travel dropped 4%, down 12.1p to 259.8p, after a downgrade by Deutsche Bank and as traders monitored the civil unrest in Egypt, one of the travel industry's leading destinations.

Pubs and brewing group Marston's saw its share price drop 1.5p to 102.3p after the company reported strong trading figures for Christmas and New Year.

The 11.2% rise in the 12-day period helped the Tavern Table owner to offset the impact of snow disruption at the start of December, while its operating margin was slightly better than a year earlier.

Fellow pub company and brewer Fuller, Smith & Turner was down 3.5p at 616p despite reporting that sales of its own-brewed beers including London Pride returned to growth.

But it echoed the sentiments in the consumer confidence survey when it warned that customers' spending power was likely to be squeezed by the Government's austerity measures.

Meanwhile, banknote printer De La Rue said supplies to a key customer were still suspended as it is yet to resolve talks over production problems five months after they first emerged. Its shares dipped 12p to 686.5p, or 1.7%.

The biggest Footsie risers were Inmarsat up 16p at 681.5p, Capita ahead 12.5p at 687.5p, Man Group up 4.6p at 296.5p and Randgold Resources ahead 38p at 4847p.

The biggest Footsie fallers were Essar Energy down 30.5p at 512.5p, Vedanta Resources off 109p at 2291p, TUI Travel down 12.1p at 259.8p and BG Group down 58p at 1334p.

16.05: The Footsie is 72.5 points lower at 5,892.6 as the end of the session approaches.

We have just published a look ahead to the corporate and economic news scheduled next week.

15.00:

On Wall Street, the Dow Jones opened slightly higher following US GDP numbers.

Although the Dow has now falen back and is flat - 1.44 points lower at 1.989.39.

In London, the FTSE 100 is 45.33 points lower at 5919.75.

14.15:

US GDP growth in the fourth quarter of 2010 has come in at 3.2%.

That's shy of bullish predictions of 3.5% growth but still shows a gathering recovery in the world's largest economy after 2.6% in the third quarter.

And it will only make the head-scratching following this week's 0.5% fall in UK GDP more intense.

We will have to see how the US markets react when they open in the next hour.

London shares shrugged at the US growth data. The FTSE 100 remains 49.24 points lower at 5915.84.

13.00:

A lunchtime update - the FTSE 100 is 63.62 points lower at 5901.46.

Fourth quarter earnings in the United States is providing little comfort for investors with Amazon.com missing Wall Street revenues targets, while Procter & Gamble and rival Colgate-Palmolive reported lower profits.

In London, miners have also lost most of yesterday's gains as further fears that China will hike interest rates to battle inflation played on the market.

Fresnillo and Antofagasta are among the biggest fallers, down 50p to 1287p and 35p to 1405p respectively.

Shares in TUI Travel have dropped 3%, down 9p to 262.9p, as traders monitored the civil unrest in Egypt, one of the travel industry's leading destinations.

Pubs and brewing group Marston's has seen its share price drop 0.8p at 103p after the company reported strong trading figures for Christmas and New Year. The 11.2% rise in the 12-day period helped the Tavern Table owner to offset the impact of snow disruption at the start of December, while its operating margin was slightly better than a year earlier.

Fellow pub company and brewer Fuller, Smith & Turner is down 4.5p at 615p despite reporting that sales of its own-brewed beers including London Pride returned to growth.

11.30:

The FTSE is bumping along today, 44.93 points lower at 5920.15.

Things may not change a great deal until we get those US GDP figures later today.

In business news, frozen food supermarket Iceland and toy emporium Hamleys are to be sold by failed Icelandic bank Landsbanki, according to reports today.

In commodities, oil prices have stuck higher this week, with Brent on the verge of hitting $100 a barrrel. But the oil market is now characterised by a divergence between the Brent Creude measure of oil and WTI, the US standard. We explain things here.

In currency, the pound is at $1.5879 compared to $1.5899 at the previous close. Against the euro, the pound is €1.1575 compared to €1.1621 at the previous close.

09.50:

The FTSE 100 Index fell today ahead of crucial US GDP data, with TUI and GlaxoSmithKline suffering.

The Footsie tracked Asian markets lower today as investors reacted to lacklustre earnings in America and a credit-rating downgrade for Japan.

Signs of weaker consumer confidence here in the UK also knocked shares.

'The market is lacking much direction, it is easier to take profits than anything else, and consumer confidence has not helped at all,' said Keith Bowman, analyst at Hargreaves Lansdown.

There was also uncertainty ahead of GDP figures in the United States, even though the world's biggest economy is expected to show further momentum with fourth quarter output at an annualised rate of 3.5%.

Investors were reluctant to take big positions ahead of the GDP announcement, scheduled for release at 1.30pm.

The FTSE 100 Index was 43.6 points lower at 5921.4 ahead of the GDP numbers and after the Nikkei 225 closed more than 1% lower in Japan.

This was after Standard & Poor's lowered the country's long-term sovereign debt rating one notch to AA- due to its ballooning public debt.

Fourth quarter earnings in the United States provided little comfort for investors as Amazon.com missed Wall Street revenues targets, while Procter & Gamble and rival Colgate-Palmolive reported lower profits.

In London, TUI Travel was the heaviest faller, down 9.4p, or 3.5%, to 262.5p after Snowfall in the UK and the overthrow of the Tunisian government have knocked recent bookings.

GlaxoSmithKline also fell, down 25.5p to 1,147.5p.

Heavyweight mining stocks were a drag on the index, pulled lower as jitters about prospects for the economic outlook ahead of US growth data depressed metal prices.

BHP Billiton lost 2.3% and Vedanta Resources fell 1.8%.

Shares in pubs and brewing group Marston's were 0.4p lower at 103.4p after the company reported strong trading figures for Christmas and New Year.

The 11.2% rise in the 12-day period helped the Tavern Table owner to offset the impact of snow disruption at the start of December, while its operating margin was slightly better than a year earlier.