London close: Stocks fall for third day on Greek fears, weak data

UK stocks declined for the third straight day on Tuesday as ongoing fears about Greece continued to erode investor confidence, while markets were dampened further by some poor economic data.

Nevertheless, strong gains from retailers helped markets to trim losses in afternoon trade, with London's FTSE 100 finishing the session down just 0.1% at 6,829, bouncing off an intraday low of 6,777.89 reached early on.

Stocks got off to a bad start after figures showed that the annual rate of Chinese inflation fell dramatically to a five-year low of 0.8% in January from 1.5% the month before, missing consensus forecasts of a slowdown to 1%.

Meanwhile, UK industrial production unexpectedly dipped 0.2% in December after a sharp drop in mining and quarrying production. Economists had expected growth of 0.1%.

Greece dominates market sentiment

Worries about the future of Greece were keeping UK investors cautious ahead of a meeting of European Union finance ministers on Wednesday, as the new government looks to ease the terms of its €240bn bailout.

Stocks in Athens soared as much as 8% on Tuesday afternoon on renewed hopes for a deal between the cash-strapped and Europe, after reports that new prime minister Alexis Tsipras had arranged a phone call with European Commission (EC) president Jean-Claude Juncker.

However, an EC spokeswoman said: “Our expectations are low that any final agreements will be reached on Greece this week" and that negotiations between Greece and the EC had so far 'not been very fruitful'."

Retailers on shopping lists

Retailers advanced after the British Retail Consortium (BRC) revealed that the annual rate of UK sales growth picked up to 1.6% in January after a 1% rise in December, lifting shares in high street names such as Dixons Carphone, Marks & Spencer and Next.

Food retailers Tesco and Morrisons were also in demand after Kantar data showed that UK grocery sales increased by 1.1% in the 12 weeks to 1 February, the fastest rate of sales growth since last June. Sainsbury however was reeling after Kantar said that the grocer lost its position as the second-largest retailer by market share to Walmart's Asda.

Mining stocks were dominating the fallers list as metal prices weakened and Chinese economic data disappointed, with Fresnillo, Antofagasta, Rio Tinto and BHP Billiton registering steep losses. Anglo American declined after saying that profits at its part-owned South African iron ore division sank in 2014, while Randgold was weighed down by a ratings cut by Deutsche Bank to ‘hold’.

Oil stocks including Tullow Oil, BP and BG Group were also weaker as Brent crude futures dropped nearly 2%.

Royal Mail was also a heavy faller after JPMorgan Cazenove downgraded its stance on the postal delivery group to ‘neutral’ and cut its target price for the shares from 575p to 505p.

Shares in online betting company 888 Holdings soared 18% on speculation that a buyout bid, the value of which was put at £750m, from rival William Hill, could soon materialise.

Market Movers

techMARK 3,094.39 +0.78%
FTSE 100 6,829.12 -0.12%
FTSE 250 16,658.74 +0.48%

FTSE 100 - Risers
Marks & Spencer Group (MKS) 498.70p +4.88%
easyJet (EZJ) 1,738.00p +3.76%
Tesco (TSCO) 241.85p +3.62%
Morrison (Wm) Supermarkets (MRW) 184.10p +3.43%
Dixons Carphone (DC.) 424.80p +2.61%
Babcock International Group (BAB) 1,054.00p +2.53%
Next (NXT) 7,250.00p +2.40%
London Stock Exchange Group (LSE) 2,387.00p +2.27%
Coca-Cola HBC AG (CDI) (CCH) 1,102.00p +2.13%
InterContinental Hotels Group (IHG) 2,665.00p +2.11%

FTSE 100 - Fallers
Royal Mail (RMG) 432.20p -4.91%
Fresnillo (FRES) 859.50p -4.07%
Randgold Resources Ltd. (RRS) 5,225.00p -3.51%
Rio Tinto (RIO) 2,992.50p -3.31%
Antofagasta (ANTO) 693.50p -3.21%
BHP Billiton (BLT) 1,495.00p -3.08%
BG Group (BG.) 934.30p -2.98%
Anglo American (AAL) 1,149.00p -2.96%
Standard Chartered (STAN) 915.40p -2.55%
BP (BP.) 446.35p -2.35%

FTSE 250 - Risers
Drax Group (DRX) 412.60p +5.82%
RPS Group (RPS) 230.40p +5.74%
Micro Focus International (MCRO) 1,152.00p +4.54%
Zoopla Property Group (WI) (ZPLA) 182.00p +4.54%
Thomas Cook Group (TCG) 133.20p +4.39%
Bwin.party Digital Entertainment (BPTY) 102.40p +4.12%
Hikma Pharmaceuticals (HIK) 2,429.00p +4.11%
Allied Minds (ALM) 454.90p +3.39%
St. Modwen Properties (SMP) 459.70p +3.35%
IP Group (IPO) 250.00p +3.35%

FTSE 250 - Fallers
Hunting (HTG) 505.50p -7.84%
Vedanta Resources (VED) 431.80p -6.13%
Soco International (SIA) 294.50p -5.00%
Ophir Energy (OPHR) 144.20p -4.50%
Premier Farnell (PFL) 161.70p -4.49%
Wood Group (John) (WG.) 604.50p -4.12%
Lonmin (LMI) 172.40p -3.79%
William Hill (WMH) 377.40p -3.13%
Petrofac Ltd. (PFC) 780.00p -3.11%
Centamin (DI) (CEY) 67.60p -3.08%