Weaker than expected economic growth in Brazil fuelled global recession fears today and sparked a near 2% fall on the FTSE 100 Index.
London’s leading shares index was 109.02 points lower at 5,765.8 after official figures showed Brazil grew at 2.7% last year – a sharp slowdown from the 7.5% growth in 2010.
Renewed fears of a worldwide slowdown hit resources-based stocks, with Chilean miner Antofagasta down 55p at £13.45 and Evraz off 25.2p at £3.80.
The boost to markets caused by last week’s injection of cheap loans from the European Central Bank also began to fade, with Barclays off 14p at 238.9p and Royal Bank of Scotland down 1.21p at 26.2p.
Fund manager Hargreaves Lansdown was one of only two risers, with its hopes of survival in this week’s FTSE 100 reshuffle boosted by a rally of 3%, or 13.8p to 459.1p.
Shares in set-top box maker Pace jumped 9p to 90p after it signalled that it would take most of the blow from supply chain issues relating to Thailand’s floods in the first half of this year.
There was also tentative signs of recovery at dry-cleaning business Johnson Service Group after a 2% rise in profits to £15million for 2011.
The company issued a profits warning in January, due to tough conditions for its Johnson Cleaners arm, but has renewed bank facilities and saw a 14% improvement in profitability at its facilities management business. Shares were half a penny higher at 28.25p.
Elsewhere, takeover interest in Cable and Wireless Worldwide appeared to be coming off the boil after its shares slid 7%, or 2.3p to 31.2p, reducing its market value to £866million. It is currently the subject of approaches from Vodafone and India’s Tata Communications.
Stuart Lamont, of investment manager and financial planning specialist Brewin Dolphin in Aberdeen, noted Plexus Holdings up 0.5% at £1.09.
Nautical Petroleum was off 8.2% at 331.4p, Wood Group fell 7.6% to 705.75p and EnQuest lost 4.9% to 119.15p.