London close: UK stocks erase gains as US data misses forecasts

After a choppy session, the UK stock market finished more or less flat despite gains in the mining and telecom sectors, with a string of mostly disappointing economic data from the US weighing on sentiment.

London's FTSE 100 finished the session just 1.97 points lower (-0.03%) at 6,729.17, having hit a high of 6,765.01 early on.

"A week that sees outperforming Eurozone data and poor US figures is always going to unsettle traders, with the market unable to reconcile the sudden downturn in numbers from the world’s largest economy," said analyst Chris Beauchamp from IG.

"Today’s pre-Thanksgiving barrage of US data kept markets on the hop but provided little good news," he said.

US jobless claims increased by 21,000 to 313,000 last week, well above the 288,000 expected by the market and the highest level registered in 11 weeks.

A wave of other US data also came in worse than forecasts, including personal spending figures, the Chicago manufacturing survey, the University of Michigan consumer-confidence index, and pending home sales. Data on durable-goods orders was the only indicator to beat expectations by unexpectedly rising 0.4% in October.

Closer to home, figures released on Wednesday morning confirmed that the British economy expanded as expected in the third quarter. UK gross domestic product growth was unrevised at 0.7%, a slowdown from the 0.9% expansion seen in the second quarter but "still very decent", according to economist Howard Archer from IHS Global Insight.

Markets across Europe finished mostly lower after European Central Bank vice president Vitor Constancio said the Bank may consider sovereign bond-buying early next year. His comments "suggested full sovereign quantitative easing would not come until next year", said analyst Jasper Lawler from CMC Markets UK.

Mining and telecom stocks on the rise, Thomas Cook plummets

MIning stocks were among the best performers on the FTSE 100, rebounding after recent declines with Antofagasta, Anglo American, Fresnillo and Randgold all registering decent gains.

BT Group was continuing to rise after saying that it was in talks with various companies about buying their UK mobile phone networks. It had previously announced it was in discussions with Telefonica, which owns O2, though Deutsche Telekom and Orange confirmed they are also in talks with BT about selling their EE joint venture.

Possible industry consolidation surrounding BT, which already runs broadband and TV operations, has also prompted speculation that other companies could look to combine operations. There were renewed rumours that Vodafone could approach Sky with a possible takeover offer or look to expand their partnership, sending shares in both firms higher.

Shares in Thomas Cook sank nearly 18% as it announced that chief executive Harriet Green has stepped down after just over two years in charge of the troubled FTSE 250 travel group. Green claimed her turnaround "was complete" as annual results showed improving profits from all divisions. Larger peer TUI Travel also finished lower.

Catering group Compass underwhelmed with its annual results, with the stock in the red after a 10.5% increase in the dividend and a 5.4% rise in full-year profits. Analysts at The Share Centre said the results were "solid" but the stock's valuation is "full".

Also falling was Britvic, who identified upcoming fierce competition between retailers in Britain, Ireland and France as a source of pressure on prices and sales growth.

Competition concerns were also weighing on Rightmove ahead of the launch of a new entrant to the property portal market early next year. Investec downgraded Rightmove from 'hold' to 'sell', saying that the launch of Agents' Mutual "could cause some trading turbulence, not helped by a tougher near-term housing market".

Meanwhile, Royal Mail was in the red after chief executive Moya Greene warned parliament that cherry-picking of more profitable urban delivery contracts seriously threatens the company's ability to provide countrywide letter delivery.

Market Movers
techMARK 2,911.43 +0.05%
FTSE 100 6,729.17 -0.03%
FTSE 250 15,788.43 -0.27%

FTSE 100 - Risers
Antofagasta (ANTO) 761.00p +3.75%
Kingfisher (KGF) 298.70p +2.54%
BT Group (BT.A) 404.40p +2.17%
SSE (SSE) 1,609.00p +1.84%
Hargreaves Lansdown (HL.) 984.00p +1.65%
Sports Direct International (SPD) 639.00p +1.51%
Anglo American (AAL) 1,347.50p +1.35%
Randgold Resources Ltd. (RRS) 4,474.00p +1.04%
Shire Plc (SHP) 4,513.00p +1.01%
Fresnillo (FRES) 755.00p +1.00%

FTSE 100 - Fallers
TUI Travel (TT.) 417.50p -2.11%
Smith & Nephew (SN.) 1,107.00p -1.42%
Compass Group (CPG) 1,060.00p -1.30%
Coca-Cola HBC AG (CDI) (CCH) 1,428.00p -1.24%
Carnival (CCL) 2,639.00p -1.05%
BP (BP.) 437.90p -1.04%
GKN (GKN) 336.90p -1.00%
Sainsbury (J) (SBRY) 239.00p -0.99%
easyJet (EZJ) 1,545.00p -0.96%
ITV (ITV) 207.20p -0.96%

FTSE 250 - Risers
Zoopla Property Group (WI) (ZPLA) 190.20p +6.50%
AO World (AO.) 230.00p +5.84%
Balfour Beatty (BBY) 184.70p +4.47%
Daejan Holdings (DJAN) 5,125.00p +2.91%
Intermediate Capital Group (ICP) 469.80p +2.87%
Redrow (RDW) 280.10p +2.68%
Kaz Minerals (KAZ) 254.00p +2.58%
JD Sports Fashion (JD.) 477.60p +2.49%
Brewin Dolphin Holdings (BRW) 271.90p +2.33%
Greencore Group (GNC) 278.10p +2.21%

FTSE 250 - Fallers
Thomas Cook Group (TCG) 113.50p -17.69%
Evraz (EVR) 152.30p -6.33%
Britvic (BVIC) 655.00p -5.96%
QinetiQ Group (QQ.) 196.50p -4.66%
Kier Group (KIE) 1,431.00p -3.44%
Telecom Plus (TEP) 1,215.00p -3.42%
Mitchells & Butlers (MAB) 363.50p -3.35%
Afren (AFR) 65.15p -2.98%
Betfair Group (BET) 1,331.00p -2.78%
Fisher (James) & Sons (FSJ) 1,031.00p -2.64%