London close: UK GDP, Eurozone concerns weigh on stocks

28th Mar 2012 16:40

- UK Q4 GDP weaker than first thought - RSA leads ex-div stocks lower - Comments from ECB's Weidmann weigh on marketsJust a dozen or so stocks on the FTSE 100 finished in the blue on Wednesday as the benchmark index sank a whole percentage point to its lowest level of the day. A weaker-than-expected GDP reading in the UK and some comments by a European Central Bank (ECB) policymaker fuelled the selling this afternoon with the Footsie finishing just above 5,800.The UK economy did worse in the last three months of 2011 than previously thought with the Office for National Statistics (ONS) revising down its GDP estimates. GDP fell by 0.3% in the fourth quarter, weaker than the 0.2% contraction previously estimated by the ONS. The downward revision came from the transport, business services and finance sectors not performing as well as previously thought. ECB council member and head of Germany's Bundesbank, Jens Weidmann, has dampened optimism surrounding plans to increase the Eurozone firewall. He said that "whether we like it or not, we are also changing the rules of the game in monetary union and might set incentives that lead to new problems in the future." He said that what needs to be done is to address the "root causes" of the problems and "we must realise that all the money we put on the table will not buy us a lasting solution to the crisis."In other news, concerns over the US economy were also weighing on sentiment today. In an exclusive interview with US television station ABC, Federal Reserve Chairman Ben Bernanke said that the increase in gas prices could boost inflation in the following months, decrease consumer income and cause a "hit on growth". EX-DIV STOCKS TUMBLESome heavyweights on the Footsie fell steeply today after trading without the right to their latest dividends, including RSA Insurance (down 7.5%), Schroders (-4.0%), Eurasian Natural Resources Corp (-4.0%), Anglo American (-3.9%) and Prudential (-3.6%).Russian steel giant Evraz fell nearly 6% after saying that it expects the global steel industry to remain challenging in 2012. Sector peer Randgold Resources finished down 2% despite assuring that operations at its mines in Mali have continued to operate following a military coup in the country which began last week. Miner Rio Tinto also fell even though it announced that it has received a binding offer for its specialty aluminas business from HIG. Contract caterer Compass was among the few stocks making gains, a day after yesterday's trading statement in which it said that margins were flat in the first half. Nomura said today that it is not concerned by the absence of margin improvement as it reflects on-off factors and "CPG remains one of our top sector picks".Inter-dealer broker ICAP fell 3.5% after it left full year guidance unchanged despite seeing an increase in risk appetite in some markets this year. "In the last three months we have seen an improvement in risk appetite in some markets. We expect to see a slow move towards more normalised markets as the year progresses," said Michael Spencer, Group Chief Executive Officer. FTSE 250: KENMARE, PETROPAVLOVSK BUCK THE TRENDDespite mining stocks falling by an average 2.9%, second-tier mining peers Kenmare Resources and Petropavlovsk bucked the trend to finish higher after their full-year results. Kenmare reported revenues of $167.5m in 2011, up from $91.6m the year before, helped by rising prices. The group swung to a pre-tax profit of $23.7m versus a loss of $16.3m in 2010. Meanwhile, gold producer Petropavlovsk rose after seeing revenue double in 2011 on the back of higher production and soaring gold prices. Meanwhile, gold miner Centamin dropped on the back of fuel subsidy fears. Given the economic challenges facing Egypt at the moment (not least because of the removal of the Mubarak regime) the company has been forced to get half of its fuel on the international market but negotiations are ongoing with the government over future subsidies. Elsewhere, JKX Oil & Gas plunged nearly 14% after saying that a lumpy tax charge and an ambitious capital expenditure programme means that shareholders will have to go without a dividend in respect of 2011.BCFTSE 100 - RisersWhitbread (WTB) 1,849.00p +2.15%Sage Group (SGE) 300.00p +1.66%International Power (IPR) 383.40p +0.87%Shire Plc (SHP) 2,140.00p +0.80%Wolseley (WOS) 2,445.00p +0.41%Next (NXT) 3,009.00p +0.40%Smith & Nephew (SN.) 633.50p +0.40%Reed Elsevier (REL) 562.50p +0.36%Compass Group (CPG) 653.00p +0.31%Associated British Foods (ABF) 1,219.00p +0.16%FTSE 100 - FallersRSA Insurance Group (RSA) 107.10p -7.51%Vedanta Resources (VED) 1,232.00p -5.52%Evraz (EVR) 359.80p -5.51%Antofagasta (ANTO) 1,118.00p -5.41%Fresnillo (FRES) 1,609.00p -4.11%Schroders (SDR) 1,576.00p -4.02%Kazakhmys (KAZ) 906.50p -4.02%Eurasian Natural Resources Corp. (ENRC) 594.50p -3.96%Anglo American (AAL) 2,347.00p -3.89%Prudential (PRU) 768.50p -3.64%FTSE 250 - RisersKenmare Resources (KMR) 48.55p +2.75%UK Commercial Property Trust (UKCM) 72.50p +2.18%Spirit Pub Company (SPRT) 62.00p +2.06%SVG Capital (SVI) 290.00p +1.86%PayPoint (PAY) 617.50p +1.65%Laird (LRD) 217.60p +1.63%Cranswick (CWK) 812.00p +1.56%Genesis Emerging Markets Fund Ltd. (GSS) 505.00p +1.41%Spirent Communications (SPT) 158.70p +1.34%TUI Travel (TT.) 197.40p +1.28%FTSE 250 - FallersCentamin (DI) (CEY) 71.05p -9.26%Petra Diamonds Ltd.(DI) (PDL) 175.70p -6.64%Bumi (BUMI) 659.00p -5.52%Atkins (WS) (ATK) 749.00p -5.43%Domino's Pizza UK & IRL (DOM) 446.00p -5.41%Hochschild Mining (HOC) 464.00p -4.92%Lamprell (LAM) 339.00p -4.78%Afren (AFR) 129.60p -4.35%New World Resources A Shares (NWR) 430.20p -4.17%Avocet Mining (AVM) 186.10p -4.12%