The FTSE 100 Index closed 56.2 points lower at 5,608.3 today despite US unemployment claims falling to their lowest level in four years in a rare hopeful sign for the world’s biggest economy.
Investors were left disappointed by minutes of the US Federal Reserve’s most recent meeting, which put an end to hopes of any further quantitative easing to boost growth.
Sentiment was further dampened by speculation that economic powerhouse China will tomorrow announce a worrying slowdown in gross domestic product as the eurozone debt crisis and slowing US growth undermines its export markets.
Heavily-weighted miners, who rely on China’s thirst for fuel and metal, led London’s leading shares index lower, with Rio Tinto down 4%, or £1.07 to £29.26 and Antofagasta off 43p at £10.40.
Emerging market investment specialist Ashmore Group was the biggest faller after its assets under management fell 3.3% to £41billion, which was lower than City expectations. Shares fell 7%, or 22.2p to 307.8p.
Security group G4S was 3% lower, off 7.4p to £2.83 after it admitted it faced staffing issues just two weeks before the Olympic Games, prompting the UK Government to step in with an additional 3,500 troops.
A £3.2billion takeover deal sparked major interest in the FTSE 250 Index after the board of London-based media buying firm Aegis, which has clients including Coca-Cola and Disney, backed an offer from Japan’s Dentsu.
The deal came as a surprise to City analysts and prompted Aegis shares to rally 45%, or 73.1p to 235.3p – just short of the £2.40 a share takeover price.
Superdry chain SuperGroup rose 15% after it spared investors another profits warning and said it would slow its growth plans to a more measured pace following a series of blunders. Shares rose 50.5p to £3.85.
Associated British Foods gained 9p to £12.75 after it said its budget retail chain Primark enjoyed a 16% sales boost in the 16 weeks to June 23, helped by resilient demand and more overseas store openings.
Alan MacPhee, of investment manager and financial planning specialist Brewin Dolphin in Aberdeen, noted Premier Oil 2.09% higher at 366.5p, BP adding 0.59% to 435.1p and Wood Group rising 0.49% to 723.5p. Aggreko fell 3.71% to £19.19, Petrofac dropped 1.72% to £14.29 and SSE was 0.63% lower at £14.20.