London close: Footsie pares gains after gloomy GDP data

25th Apr 2012 16:36

- UK back in recession, GDP figures show- Markets await FOMC statement- Miners gain after China says growth will be 'robust'Despite a strong start, the FTSE 100 finished only mildly higher on Wednesday afternoon as investors digested some worse-than-expected UK economic data.The Office for National Statistics said economic output shrank by 0.2% in first three months of this year, with construction proving a particular drag. GDP contracted by 0.3% in the last three months of 2011, according to the ONS' latest figures. Forecasters had predicted that the UK would avoid the 'double dip' with 0.1% growth.Analyst Chris Crowe from Barclays Capital said: "The weak GDP outturn, combined with more persistent than expected inflation, highlights the MPC's ongoing policy headache." He now says that the bank's previous call of 'no further QE in May' is now less certain following today's figures. "Even if QE is not extended then a continued stagnation in demand could yet lead the MPC to act later in the year." Markets showed caution ahead of the outcome of the two-day meeting of Federal Reserve policymakers (the Federal Open Market Committee, or FOMC) later this evening. While economists are broadly expecting the central bank to keep rates unchanged, the focus will be on the following press conference with Chairman Ben Bernanke for comments about the US economy. Meanwhile, Chinese Prime Minister Wen Jiabao said yesterday that the world's second-largest economy will continue to growth at a "robust" pace this year, despite the government reducing its GDP growth forecast from 8% to 7.5% last month. "China has confidence that it will sustain steady and robust economic growth," he said at a meeting in Stockholm. "China will remain committed to reform and opening up." FTSE 100: Miners wanted after comments from Chinese PMThe mining sector, a category often sensitive to the outlook for the Chinese economy, was making gains on Wednesday afternoon after the country's Premier sought to ease concerns about slowing growth. Vedanta Resources, Glencore International, Xstrata, Kazakhmys, Anglo American and Fresnillo among the best performers on the FTSE 100 on hopes that demand for commodities from China will be as "robust" as its economic growth. Luxury brand Burberry was also being helped higher by Wen's remarks.Diversified mining group Rio Tinto was also in demand on the news that it has received regulatory approvals for the development and operation of the Simandou iron ore project in Guinea. Drugs giant GlaxoSmithKline was a heavy faller after revealing its first-quarter results at midday. The firm saw a modest increase in group revenue in the first three months of 2012 as growth in the US, Emerging Markets/Asia Pacific (EMAP) and Japan offset declines in Europe. "Overall a slightly disappointing set of Q1 2012 results, with revenues and core EPS missing consensus estimates by 3% and 6%, respectively," said analysts at US broker Jefferies. Assets under administration at life assurance leviathan Standard Life rose a bit more than the market had been expecting in the first quarter of 2012, causing shares to advance. Leading the downside were Centrica, Reed Elsevier, Tesco and Rolls-Royce after going ex-dividend. FTSE 250: Lamprell and Afren head opposite waysOil and gas engineering firm Lamprell was a high riser after saying it was to build two further rigs for Abu Dhabi's National Drilling Company (NDC). The company already has four of the jackup rigs under construction for the Middle Eastern company. Investec reiterated its buy recommendation for the stock this morning, saying that today's news improves medium-term revenue visibility. However, oil firm Afren took a hit after the company reported 'disappointing' results from its Nunya 1x eploration well in the Keta block offshore Ghana. The well, in which Afren has a 35% stake, encountered thick and high quality but water bearing reservoirs. Electricals retailer Kesa was making gains after UBS upgraded the stock from neutral to buy, saying that the risk/reward is to the upside. FTSE 100 - RisersVedanta Resources (VED) 1,225.00p +4.26%International Consolidated Airlines Group SA (CDI) (IAG) 174.10p +3.32%Glencore International (GLEN) 429.20p +3.24%BAE Systems (BA.) 300.30p +3.09%IMI (IMI) 1,009.00p +3.01%Xstrata (XTA) 1,183.00p +2.96%Kazakhmys (KAZ) 882.00p +2.86%Antofagasta (ANTO) 1,201.00p +2.74%Johnson Matthey (JMAT) 2,375.00p +2.59%Burberry Group (BRBY) 1,441.00p +2.42%FTSE 100 - FallersCentrica (CNA) 310.20p -3.81%GlaxoSmithKline (GSK) 1,413.50p -3.02%Tesco (TSCO) 317.00p -2.60%Reed Elsevier (REL) 512.50p -2.57%Man Group (EMG) 95.20p -1.86%Polymetal International (POLY) 939.00p -1.16%Morrison (Wm) Supermarkets (MRW) 285.20p -1.14%BP (BP.) 432.30p -0.98%Associated British Foods (ABF) 1,228.00p -0.89%Petrofac Ltd. (PFC) 1,731.00p -0.80%FTSE 250 - RisersOcado Group (OCDO) 121.40p +6.96%Lamprell (LAM) 343.60p +6.51%Ruspetro (RPO) 200.00p +5.26%International Personal Finance (IPF) 257.40p +5.06%Home Retail Group (HOME) 105.30p +4.46%Kenmare Resources (KMR) 51.90p +4.32%Petropavlovsk (POG) 470.80p +4.21%Kesa Electricals (KESA) 57.65p +4.06%Lonmin (LMI) 1,034.00p +3.97%Hochschild Mining (HOC) 491.50p +3.69%FTSE 250 - FallersAfren (AFR) 134.00p -6.10%Hansteen Holdings (HSTN) 71.10p -3.92%Fidessa Group (FDSA) 1,479.00p -3.40%Greggs (GRG) 498.50p -3.11%Drax Group (DRX) 529.00p -3.02%National Express Group (NEX) 210.50p -2.82%International Public Partnerships Ltd. (INPP) 118.20p -2.72%Tullett Prebon (TLPR) 335.60p -2.44%Balfour Beatty (BBY) 257.60p -2.42%Oxford Instruments (OXIG) 1,219.00p -2.32%BC