Market report: Wednesday close

By THIS IS MONEY
Updated:

 

THE prospect of higher interest rates and a downbeat start to trading in New York conspired to send the FTSE-100 index down today.

A poor performance by mining stocks also knocked around eight points off the Footsie, leaving it 29.1 points lower at 4539.9 by the end of the session.

London's fall mirrored losses on Wall Street, where the Dow Jones Industrial Average continued yesterday's downward spiral.

However investors were hopeful the Dow would recover some of the fall after Federal Reserve chairman Alan Greenspan hinted that an interest rate hike was on the cards.

One analyst said London traders were now looking towards Friday's UK GDP figures, which should indicate the way the Bank of England will vote on interest rates next month.

Financial stocks were in retreat in London with Abbey National falling nearly 2% or 7.5p to 435p ahead of the company's eagerly-awaited first quarter trading statement tomorrow morning. Rival bank Lloyds TSB was 0.75p cheaper at 426p while HBOS slipped 6.5p to 735.5p.

Insurer Prudential was also in negative territory - down 12p at 453.5p - despite reporting a positive start to trading this year.

The market's weakness also deflected attention from a similarly upbeat first quarter trading update from news and information group Reuters. Even though recurring revenues were better than hoped, shares still fell by nearly 6% or 24.5p to 390.5p, leaving the stock at the top of the fallers board. One area of concern was guidance from Reuters that recurring revenues were more likely to show a 'gradual improvement' in the second half.

The mining sector was dragging the Footsie lower after a further fall in gold prices and a downbeat production report from Rio Tinto, which fell 58p to 1283p.

Anglo American, which was holding its annual meeting today, slipped 63p to 1229p while Footsie newcomer Antofagasta eased 57p to 978p.

Among other top-flight fallers, British Airways declined 13.25p to 285.75p and BAE Systems weakened 10p to 212p.

Outside the top flight, credit card firm Egg, which reported a drop in first quarter profits at its UK arm, fell half a penny to 154p as investors were made to wait for news on the auction of Prudential's 79% stake in the company.

Record results at software group Autonomy failed to spark interest in its shares which fell 4p to 253p. Autonomy said pre-tax profits grew 111% to $2.7m (£1.5m) during the first three months of the year - ahead of market expectations.

And telecoms group Colt fell nearly 5% - 4.5p to 86p - despite delivering first-quarter results in line with expectations.

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