LONDON (ShareCast) - Markets finished firmly in negative territory on Friday afternoon as investors showed concern with just a few days left before the fiscal cliff deadline.

President Barack Obama has called a meeting with congressional leaders today in which they are expected to draw up a piece of legislation to be submitted to the House of Representatives (HoR).

Meanwhile, the Republicans are scheduled to meet on Sunday, the first HoR Sunday session in more than two years.

"The ongoing fiscal cliff crisis is drawing to an end as today sees President Obama calls a meeting of top congressional leaders to try to create a deal which would be palatable for both sides," said research analyst Joshua Mahony from Alpari.

"However, as today has gone on, it has become more and more likely that the fiscal cliff may actually occur as rumours circle that there has been very little ground made in terms of finding compromise within the two parties."

According to Bloomberg this afternoon, Obama is to make a new, scaled-back package to avert some of the effects of the automatic spending cuts and tax increases set to begin in January.

Indices in the US registered a weak start in New York, as Wall Street shrugged off forecast-beating economic data this afternoon: the Chicago purchasing managers' index (PMI) and pending home sales both surprised to the upside.

Meanwhile, sentiment in Europe was dampened this morning by the news that third-quarter French economic growth was revised lower to 0.1% from an earlier estimate of 0.2%. Analysts were expecting no change.

Company news

Platinum miner Lonmin dropped after announcing that its CEO Ian Farmer has stepped down from the company due to a serious illness. "We wish him well with his ongoing treatment and will stay in close touch with him as a valued colleague and friend," said Chairman Roger Phillimore.

The wider mining sector was out of favour this morning as risk appetite was scaled back: Polymetal, ENRC and Vedanta were among the worst performers.

In contrast, defensive sectors such as supermarkets (Morrison, Tesco) and pharmaceuticals (Shire, GlaxoSmithKline) were in demand.

Publishing and information services group Pearson edged higher after saying it is to invest $89.5m in cash for a 5% interest in Nook Media, a subsidiary of Barnes & Noble and Microsoft.

The FTSE 100 company will invest $89.5m cash, a 5% interest, in Nook Media which sells e-readers, tablets and digital books in the US.

On AIM, oil explorer San Leon Energy fell after reporting that its Nowa Sol exploration programme in Poland has showed high potential for oil production.

Sector peer Ruspetro saw shares surge after Russian authorities granted the company a licence extension for its Palyanovsky Block.

US-focused hydrocarbon explorer Caza Oil & Gas jumped after saying that initial production has started at its Forehand Ranch Prospect in Eddy County, New Mexico.

Randall and Quilter edged higher after completing the acquisition of Alma Insurance Company after receiving regulatory approval from the Finnish Financial Services Authority.

FTSE 100 - Risers
Morrison (Wm) Supermarkets (MRW) 262.70p +0.57%
Melrose Industries (MRO) 231.70p +0.39%
BG Group (BG.) 1,011.00p +0.35%
Aberdeen Asset Management (ADN) 366.90p +0.33%
Tesco (TSCO) 337.10p +0.33%
SABMiller (SAB) 2,846.50p +0.23%
Babcock International Group (BAB) 975.00p +0.21%
Croda International (CRDA) 2,369.00p +0.17%
Associated British Foods (ABF) 1,574.00p +0.13%
Reckitt Benckiser Group (RB.) 3,900.00p +0.13%

FTSE 100 - Fallers
Admiral Group (ADM) 1,173.00p -2.09%
Polymetal International (POLY) 1,168.00p -1.77%
International Consolidated Airlines Group SA (CDI) (IAG) 184.70p -1.76%
Wolseley (WOS) 2,877.00p -1.54%
BT Group (BT.A) 234.00p -1.52%
Capital Shopping Centres Group (CSCG) 357.40p -1.52%
Resolution Ltd. (RSL) 248.00p -1.51%
British Sky Broadcasting Group (BSY) 769.00p -1.47%
Fresnillo (FRES) 1,857.00p -1.43%
Prudential (PRU) 865.00p -1.37%

FTSE 250 - Risers
Salamander Energy (SMDR) 190.80p +5.47%
New World Resources A Shares (NWR) 316.00p +4.29%
Renishaw (RSW) 2,031.00p +4.21%
Savills (SVS) 459.30p +3.21%
Pace (PIC) 192.50p +2.94%
Hansteen Holdings (HSTN) 80.90p +2.60%
Dialight (DIA) 1,039.00p +2.36%
Synergy Health (SYR) 1,087.00p +2.26%
Heritage Oil (HOIL) 190.00p +2.21%
Dignity (DTY) 1,080.00p +2.18%

FTSE 250 - Fallers
JD Sports Fashion (JD.) 682.00p -3.88%
ITE Group (ITE) 235.00p -3.53%
Lonmin (LMI) 277.90p -2.66%
BH Global Ltd. GBP Shares (BHGG) 1,133.00p -2.33%
Home Retail Group (HOME) 125.90p -2.25%
Dixons Retail (DXNS) 28.36p -2.21%
Supergroup (SGP) 560.50p -2.18%
Ted Baker (TED) 1,124.00p -2.18%
Man Group (EMG) 81.75p -2.10%
COLT Group SA (COLT) 98.80p -2.08%

BC

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