London close: Weak earnings and data hit UK stocks as FTSE falls 0.6%

London’s FTSE 100 fell 0.6% on Tuesday, pulling back from its highest level in over four and a half months, as disappointing economic data from across the globe weighed on sentiment.

The UK benchmark index finished at 6,811.61, down 40.79 points from Monday’s finish of 6,852.40, its best close since 5 September 2014.

Stock markets opened on the back foot on Tuesday morning after figures showed UK economic growth slowed to just 0.5% in the fourth quarter of 2014 due to contractions in construction and production. Economists had expected growth to come in at 0.6% after a 0.7% increase in the third quarter.

Newsflow from the States also dampened the mood after US durable goods orders unexpectedly dropped by 3.4% in December, compared with the 0.3% growth forecast.

A barrage of weak quarterly earnings from some US blue chips, including Microsoft, Procter & Gamble and Caterpillar, also saw Wall Street open with sharp losses. Investors were also showing caution ahead of results from Apple due out after the closing bell.

“The rally has turned to rout this afternoon as dismal earnings and economic data from the US see markets retreat around the globe,” said analyst Chris Beauchamp from IG.

Overnight, it was revealed that industrial profits in China dropped by 8% year-on-year in December, while a measure of small business confidence in Japan also weakened in January.

Elsewhere, Russia was in focus after Standard & Poor’s downgraded its credit rating to ‘junk’ on Monday night, while investors were still digesting the outcome of the weekend’s elections in Greece after anti-austerity, far-left party Syriza won the poll and agreed to form a coalition government.

Airlines rise, Afren sinks

Shares in Easyjet ascended after the British budget airline said it now expects an increase in revenues per seat in the first half. The company said revenue per seat at constant currency should rise by 2% on last year, compared with its previous guidance of “flat to very slightly up”.

Sector peer IAG also gained after Aer Lingus said it would recommend a sweetened €1.36bn takeover offer from the British Airways owner. “The board of Aer Lingus has indicated to IAG that the financial terms of the proposal are at a level at which it would be willing to recommend to Aer Lingus shareholders,” IAG said in a statement.

The share price of oil group Afren collapsed nearly 70% after the company said it needs to restructure its debts or receive an equity injection due to the “significant dislocation” in the oil market. Investors are still waiting on Nigerian producer Seplat to see if it makes a firm offer for the company.

Online housing-market portal Zoopla surged as investors shrugged off the launch of Onthemarket.com, a new property site set up by estate agents hoping to break Zoopla’s and Rightmove’s control of the market.

Banks were under pressure, including HSBC, Barclays, Standard Chartered, RBS and Lloyds. HSBC was hit with a ratings cut at Investec from ‘add’ to ‘hold’, with the broker saying that the bank’s fourth-quarter results next month could disappoint.

Dixons Carphone was a heavy faller after Morgan Stanley downgraded the stock to ‘underweight’, while Centrica was boosted by a Credit Suisse upgrade to ‘outperform’

Market Movers
techMARK 3,063.29 -0.63%
FTSE 100 6,811.61 -0.60%
FTSE 250 16,372.74 -0.59%

FTSE 100 - Risers
Centrica (CNA) 282.70p +4.16%
Randgold Resources Ltd. (RRS) 5,595.00p +2.66%
International Consolidated Airlines Group SA (CDI) (IAG) 561.00p +2.19%
SSE (SSE) 1,545.00p +1.91%
easyJet (EZJ) 1,789.00p +1.88%
United Utilities Group (UU.) 1,015.00p +1.70%
Fresnillo (FRES) 910.00p +1.51%
Aggreko (AGK) 1,542.00p +0.98%
Sage Group (SGE) 484.00p +0.83%
Morrison (Wm) Supermarkets (MRW) 198.50p +0.81%

FTSE 100 - Fallers
TUI AG Reg Shs (Post- 16/12/14)(DI) (TUIJ) 1,132.00p -3.33%
Weir Group (WEIR) 1,640.00p -2.79%
Intertek Group (ITRK) 2,268.00p -2.70%
Rolls-Royce Holdings (RR.) 879.00p -2.66%
ITV (ITV) 225.90p -2.50%
Anglo American (AAL) 1,090.00p -2.46%
Royal Mail (RMG) 440.20p -2.46%
Dixons Carphone (DC.) 419.40p -2.44%
GKN (GKN) 369.00p -2.36%
CRH (CRH) 1,624.00p -2.35%

FTSE 250 - Risers
Zoopla Property Group (WI) (ZPLA) 190.00p +12.09%
Britvic (BVIC) 688.50p +6.58%
Centamin (DI) (CEY) 69.55p +5.70%
Vedanta Resources (VED) 410.80p +5.04%
NMC Health (NMC) 500.00p +4.38%
Telecom Plus (TEP) 1,025.00p +4.38%
Rightmove (RMV) 2,443.00p +3.96%
Game Digital (GMD) 264.20p +3.61%
Countrywide (CWD) 435.00p +3.03%
Ashmore Group (ASHM) 290.00p +2.95%

FTSE 250 - Fallers
Afren (AFR) 5.54p -68.65%
Hunting (HTG) 415.00p -6.41%
Ophir Energy (OPHR) 128.20p -5.94%
Serco Group (SRP) 156.30p -4.98%
Victrex plc (VCT) 2,090.00p -4.35%
Aveva Group (AVV) 1,320.00p -4.28%
FirstGroup (FGP) 101.50p -4.15%
Just Eat (JE.) 356.90p -3.96%
Euromoney Institutional Investor (ERM) 1,056.00p -3.74%
Daejan Holdings (DJAN) 5,350.00p -3.69%