London close: Footsie falls as Greece and US fuel sell-off

2nd Jun 2011 16:55

Despite trading sideways for most of the day after a relatively sharp fall early on, the Footsie took another dive in late afternoon to finish over 1.3% lower. The mood was uneasy on Thursday as a result of sovereign debt fears in Europe and worrying news from the US, amid a host of underwhelming results in the UK.After downgrading Greek sovereign debt the night before, ratings agency Moody's further dampened sentiment in the US, after putting debt ratings for Citigroup, Bank of America and Wells Fargo on review for a possible downgrade. Stocks on Wall Street fell into the red early on.Back in London, full-year profits from speciality chemicals group Johnson Matthey came in ahead of market expectations with good performances in all parts of the business. However, investors seemed underwhelmed as the stock sunk on the blue chip index on Thursday. The warm weather and recent string of bank holidays boosted sales at Kingfisher in the 13 weeks to 30 April, but shares were under a cloud. Prime markets confirmed its 'sell' rating on the stock, saying that the share have climbed "too far too quickly" over the last couple of months. The miners were falling lower, as metals prices decline. Copper, gold and silver prices have fallen today, with the later commodity seeing a 2.65% drop. Rio Tinto, Xstrata, Fresnillo and Antofagasta were in the red. Shares in Burberry were off the mark, despite Credit Suisse raising its target price from 1,120p to 1,310p for the luxury brands. The broker has kept its 'neutral' rating, saying that "its rich valuation remains the main impediment for us to turn more positive considering the greater upside we see elsewhere in the sector." Advertising firm WPP was slightly lower despite reporting a sharp rise in revenues in the first four months of 2011. "The world continues to move at very different speeds, with revenues in the BRICs countries up over 17% in the first four months, and the Next 11 up almost 14%, showing the strongest growth, followed by the United States and the United Kingdom," the company said. ASOS, the internet fashion retailer, was a heavy faller despite reporting profits ahead of expectations in the year to 31 March as sales continued soaring.CSR, the chipmaking firm, took a hit after Numis downgraded the group to 'add', from 'buy', on the back of worrying news from its major customer Nokia this week, which cut its second-quarter outlook. Coal-fired power station operator Drax was helped from a kind word from Matrix, which upped its target price from 460p to 550p, saying that now is the time to focus on its biomass potential with UK policy becoming clearer in the next few months. Keith Clarke is to pack away his pencils and drawing board and give up the role of chief executive at design and engineering consultancy WS Atkins. Shares fell into the red. A big mover today Noventa which took a dive after the tantalum miner said it has been unable to meet its target rate of production from the Marropino mine in MozambiqueCellcast was another stock on the decline. The participatory television programming company, dropped by a fifth after failing to move into profit in the year to 31 December, despite higher revenues.---BC