London close: FTSE plunges 1.7% as investors take profits ahead of quarter-end

Sharp falls from mining and tobacco stocks sent the FTSE 100 to its lowest close in two and a half weeks on Tuesday as investors used some weak economic data as an excuse to rebalance their books before the quarter-end.

After briefly trading in the green early on, the Footsie finished had plunged 1.7% to 6,773.04 by the end of the session. The index has not settled below this mark since 13 March.

"After such a bullish day’s trading yesterday, the end of the first quarter looks to be triggering a little bit of profit-taking," said Alastair McCaig from IG.

Economic data from the UK mostly beat expectations on Tuesday, including an unexpected upwards revision to economic growth estimates for the fourth quarter and a jump in business confidence in March.

However, markets dropped sharply into the red by mid-morning after it was revealed that Eurozone core consumer prices increased at an annual rate of 0.6% in March, down from +0.7% the month before and below forecasts.

The unemployment rate for the single-currency region declined from 11.4% to 11.3% but missed the 11.2% estimate.

Uncertainty in Greece was also weighing on sentiment after leaders failed to agree on a package of reforms with lenders. According to the European Council president Donald Tusk, a deal is not likely before Easter.

Meanwhile, talks with Iran over a nuclear deal were also under the spotlight. There were reports that discussions could be extended until after Easter if no concrete agreement is signed on Tuesday, the official deadline.

Not even further stimulus measures in China could lift stocks in London's heavyweight mining sector as risk appetite took a hit. Beijing eased curbs on lending and tax policies in an effort to stop a downturn which has dampened economic growth.

Kingfisher a standout riser in a sea of red

DIY retailer Kingfisher was one of the few risers on Tuesday after impressing investors with plans to close 60 stores, as new chief executive Véronique Laury announced full-year results and set out her plans for a "very different" company. The company announced a £200m cash return for the coming financial year as it revealed adjusted annual profits fell 7.5% to £675m last year.

Mining stocks were dominating the fallers list on the Footsie, including Anglo American, Randgold Resources, Fresnillo and Antofagasta. Antofagasta on Tuesday quashed rumours that it was looking to merge with copper producing peer Teck Resources.

Deutsche Bank also weighed on stocks after saying its calculations pointed to commodities being the worst performing asset class for the first quarter of 2015. Additionally, Bloomberg reported a $1.23bn net outflow from US commodities exchange-traded funds.

British American Tobacco and Imperial Tobacco were lower on concerns that the Lorrillard-Reynolds merger will fall apart. Reynolds shareholder BAT had agreed to invest $4.7bn and was hoping to keep a 42% stake in the enlarged business, while Imperial was set to spend $7.1bn on a number of assets that the two US groups were selling.

Meggitt was out of favour after Exane BNP Paribas initiated coverage of the stock with an 'underperform' rating, saying it sees downside at current prices despite ongoing bid speculation.

Outsourcing services group Mitie fell after warning that it expects full-year profits to be pushed slightly lower than forecast by margin pressures in the homecare and social housing businesses.

Market Movers
techMARK 3,143.29 -1.18%
FTSE 100 6,773.04 -1.72%
FTSE 250 17,090.64 -0.68%

FTSE 100 - Risers
Kingfisher (KGF) 380.60p +4.33%
Babcock International Group (BAB) 984.50p +2.23%
Persimmon (PSN) 1,663.00p +0.97%
easyJet (EZJ) 1,882.00p +0.80%
Intertek Group (ITRK) 2,498.00p +0.73%
Carnival (CCL) 3,296.00p +0.67%
G4S (GFS) 295.80p +0.58%
Travis Perkins (TPK) 1,950.00p +0.52%
Barratt Developments (BDEV) 528.50p +0.48%
Dixons Carphone (DC.) 412.70p +0.39%

FTSE 100 - Fallers
Anglo American (AAL) 1,012.00p -4.53%
Imperial Tobacco Group (IMT) 2,963.00p -3.42%
British American Tobacco (BATS) 3,488.50p -2.95%
BG Group (BG.) 829.00p -2.70%
Meggitt (MGGT) 548.50p -2.58%
Fresnillo (FRES) 682.50p -2.57%
BHP Billiton (BLT) 1,473.50p -2.55%
Randgold Resources Ltd. (RRS) 4,693.00p -2.51%
Unilever (ULVR) 2,815.00p -2.49%
GlaxoSmithKline (GSK) 1,546.00p -2.43%

FTSE 250 - Risers
Serco Group (SRP) 137.90p +4.47%
Greencore Group (GNC) 322.40p +3.23%
Redefine International (RDI) 58.75p +3.16%
SIG (SHI) 203.00p +2.84%
Virgin Money Holdings (UK) (VM.) 398.00p +2.71%
Spire Healthcare Group (SPI) 374.00p +2.47%
Pace (PIC) 345.00p +2.37%
Daejan Holdings (DJAN) 5,905.00p +2.25%
Senior (SNR) 325.20p +2.04%
Saga (SAGA) 184.20p +1.99%

FTSE 250 - Fallers
Telecom Plus (TEP) 870.00p -5.64%
Mitie Group (MTO) 276.00p -5.61%
Vedanta Resources (VED) 500.00p -5.48%
Renishaw (RSW) 2,442.00p -5.13%
Premier Oil (PMO) 131.60p -4.29%
Go-Ahead Group (GOG) 2,330.00p -3.56%
Tullow Oil (TLW) 283.20p -3.44%
Ophir Energy (OPHR) 134.80p -3.30%
Ashmore Group (ASHM) 284.50p -3.17%
Petrofac Ltd. (PFC) 953.00p -3.10%