London close: UK stocks sink on Eurozone deflation, US GDP

Macro concerns weighed on UK stock markets on Friday after Eurozone consumer prices fell more than forecasts and the rate of US economic growth slowed sharply.

London's FTSE 100 finished the session down 0.9% at 6,749, ending at its lowest close since 21 January.

The Eurozone fell further into deflation in January with consumer prices falling at an annual rate of 0.6% after a 0.2% fall the month before, worse than the 0.5% drop expected.

It marked the largest decrease since July 2009 and comes after the European Central Bank announced a €60bn a month quantitative easing package to address the risk of deflation. Policymakers are trying to move inflation towards its target of just below 2%.

Over on Wall Street, strong gains from internet heavyweights Amazon.com and Google weren't enough to keep US markets afloat after the opening bell following figures which showed that annualised gross domestic product (GDP) growth eased to just 2.6% in the final three months of 2014, from 5% the preceding quarter, Analysts had expected a slowdown to 3%.

Chris Beauchamp, market analyst at IG, said: "GDP figures from across the North American continent were below expectations, lending further weight to the idea that the previously high-achieving US economy is running into tougher going."

IAG and BT provide a drag, gold miners rise

After an initial rise, British Airways and Iberia owner IAG finished with steep losses after the news that Qatar Airways has bought a 9.99% stake in the company. While the Doha-based group said it may consider raising its interest in IAG over time, analysts at Liberum said a full takeover was “highly unlikely”.

Telecoms giant BT declined despite beating analysts forecasts with a solid rise in profits in its third quarter, as it announced a new 16-year “recovery plan” to pay down its expanding pension deficit, which now stands at £7bn. The company also revealed that it would upgrade its fibre network with large-scale pilots this summer of ultrafast broadband with G.fast.

Gold miners such as Randgold Resources and Fresnillo jumped as gold prices rebounded from a two-week low.

Oil producer Afren was continuing its volatile moves, surging over 26% after extending its deadline for Seplat to make a firm offer for the UK group. The Nigerian producer now has until 13 February to 'put up or shut up'.

Market Movers
techMARK 3,050.88 -1.02%
FTSE 100 6,749.40 -0.90%
FTSE 250 16,305.77 -0.33%

FTSE 100 - Risers
Randgold Resources Ltd. (RRS) 5,685.00p +4.89%
Fresnillo (FRES) 899.00p +4.23%
Tullow Oil (TLW) 365.00p +4.02%
Dixons Carphone (DC.) 435.00p +2.55%
BHP Billiton (BLT) 1,443.00p +2.09%
Weir Group (WEIR) 1,680.00p +2.07%
Smiths Group (SMIN) 1,127.00p +1.53%
Anglo American (AAL) 1,113.00p +1.41%
Rio Tinto (RIO) 2,925.00p +1.35%
WPP (WPP) 1,466.00p +1.10%

FTSE 100 - Fallers
International Consolidated Airlines Group SA (CDI) (IAG) 544.50p -3.46%
Sainsbury (J) (SBRY) 255.40p -3.18%
Ashtead Group (AHT) 1,088.00p -2.77%
Morrison (Wm) Supermarkets (MRW) 179.90p -2.70%
BT Group (BT.A) 417.90p -2.61%
Diageo (DGE) 1,970.00p -2.60%
Barratt Developments (BDEV) 458.40p -2.55%
Severn Trent (SVT) 2,152.00p -2.14%
Hargreaves Lansdown (HL.) 1,011.00p -2.13%
Royal Dutch Shell 'A' (RDSA) 2,018.00p -2.04%

FTSE 250 - Risers
Afren (AFR) 5.30p +26.19%
Petrofac Ltd. (PFC) 706.00p +5.61%
Nostrum Oil & Gas (NOG) 627.00p +4.76%
Ophir Energy (OPHR) 134.30p +4.51%
Acacia Mining (ACA) 281.90p +3.95%
Cairn Energy (CNE) 192.00p +3.78%
Brit (BRIT) 273.60p +3.44%
Centamin (DI) (CEY) 66.90p +3.40%
AO World (AO.) 307.20p +2.88%
Homeserve (HSV) 337.40p +2.83%

FTSE 250 - Fallers
Zoopla Property Group (WI) (ZPLA) 180.00p -5.61%
Cobham (COB) 326.70p -4.84%
Saga (SAGA) 183.30p -4.53%
Petra Diamonds Ltd.(DI) (PDL) 153.40p -3.58%
Rexam (REX) 425.00p -3.03%
Big Yellow Group (BYG) 611.00p -3.02%
Game Digital (GMD) 275.50p -2.99%
National Express Group (NEX) 255.50p -2.89%
Oxford Instruments (OXIG) 744.50p -2.74%
Cineworld Group (CINE) 425.00p -2.68%