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FTSE Off 1 Pct On Weak U.S. Data, Oils Drag
The FTSE 100 index closed 44.82 points lower at 4249.21.
FTSE Off 1 Pct On Weak U.S. Data, Oils Drag
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Reuters
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Published: June 30, 2009 13:51h
Last modified: June 30, 2009 18:45h
Britain's top share index shed 1 percent on Tuesday in the wake of weaker than expected consumer confidence figures in the United States, with banks, miners and food retailers leading the fallers.

The FTSE 100 index closed 44.82 points lower at 4249.21.

However, the index is up 8.2 percent on the quarter, the best such performance since the final quarter of 2003 and it has gained 22.8 percent since touching a six-year low on March 9.

U.S. data showed consumer confidence fell in June after two straight months of gains and Americans saying jobs are "hard to get" increased to 44.8 percent from 43.9 percent the previous month.

The news came on the back of UK figures that revealed the British economy contracted at a much sharper pace than initially thought, falling by 2.4 percent in the first quarter, revised down from a fall of 1.9 percent. The fastest rate in more than 50 years.

"(The) session has descended into a degree of carnage after the release of some worse than expected U.S. consumer confidence figures," David Fineberg, head of trading at CMC Markets.

Falling crude prices at under $70 a barrel helped send oil majors lower. BG Group, BP and Royal Dutch Shell fell between 1 and 1.8 percent.

BG Group also said it would pay Dallas-based Exco Resources Inc $1.3 billion for an interest in shale gas resources, as oil and gas firms continue to snap up assets before an economic recovery drives prices higher.

Miners dropped between 0.5 and 3.1 percent, with Randgold Resources, Anglo American, Fresnillo, Eurasian Natural Resources and Xstrata the biggest fallers.

"Some of it is window dressing ... locking in profits from gains seen over the last few days," said Stephen Pope, chief global strategist at Cantor Fitzgerald.

Xstrata confirmed its $1 billion estimate of synergies from its proposed merger with Anglo American after UK newspaper the Times had reported advisors as saying the figure could be much higher.

Banks also headed south. Lloyds Banking Group, Royal Bank of Scotland, HSBC and Standard Chartered shed between 0.9 and 3 percent. However, Barclays was an exception, up 1.2 percent.

Astrazeneca fell 1 percent after the company and its drug development partner Pozen submitted their experimental two-in-one pain drug PN400 for regulatory approval in the United States.

Also on the downside, life insurers Prudential and Legal and General fell 0.6 to 2.2 percent, retreating from some strong gains made on Monday.

SUPPORT SERVICES BUOYED

Meanwhile British building supplies company Wolseley topped the FTSE 100 risers after it announced Chief Executive Chip Hornsby would step down with immediate effect. The stock rose 2.8 percent.

The world's biggest security firm G4S and credit information firm Experian gained 0.2 and 0.9 percent respectively.

Oil services group Petrofac rose 1.8 percent. The company said it expects to start production from the Don Southwest field in the UK North Sea in the next few days. Peer AMEC climbed 2 percent.

Thomas Cook added 2.8 percent after news the German government said it would give aid to its majority German shareholder Arcandor.

Looking ahead a quarterly poll of 13 strategists showed Britain's FTSE 100 index is expected to end the year up by around 3.7 percent.

"There is evidence to the effect that the green shoots are actually going to transform into a fully fledged recovery by the time we get into the final quarter of the year," said Mike Lenhoff at Brewin Dolphin.

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