London shares closed lower as traders reacted to mixed company earnings, a drop in British unemployment and a downgrade to the Bank of England’s growth forecasts for Britain.
The benchmark FTSE 100 index of leading companies dropped 64.24 points or 1.11 percent to close at 5,722.01 points.
“Global headline shares continued to tread with caution today as investors remained confused as to what is actually being done to solve the eurozone debt as well as the US?s impending fiscal cliff,” said Spreadex trader Shavaz Dhalla.
“Worse than expected monthly retail sales from the US also added to the concern that the global economic recovery has probably stalled,” he said.
On the London market, mining stocks took the brunt of the economic gloom, with Evraz plunging 7.01 percent to 217.40 pence, Randgold shedding 5.12 percent to 6,575 pence, Eurasian tumbling 4.63 percent to 276.20 pence and Kazkhmys falling 3.22 percent to 661 pence.
Sainsbury’s shares lost 2.40 percent to 338.80 pence as investors showed dissatisfaction with the supermarket chain’s latest results.
The company said net proft climbed 6.0 percent rise to £320 mn in the 28 weeks to September 29 versus a year earlier.
Chief executive Justin King added that Sainsbury’s “share of the grocery market is the highest for almost a decade at 16.7 percent, with 31 consecutive quarters of like-for-like sales growth.”
Prudential shares edged up 0.64 percent to 871 pence after Britain’s biggest insurer said its sales rebounded sharply in the third quarter, boosted by growth in Asia and despite a turbulent global economic backdrop.
Total insurance sales rallied 19 percent to £1.048 billion in the latest three months, Prudential said in a trading statement. Sales grew 14 percent to £3.08 billion in the first nine months of 2012, it added.
“Prudential has continued to perform strongly in the third quarter of 2012 in a global macroeconomic environment that remains turbulent,” chief executive Tidjane Thiam noted.
Other gainers included gas distributor Centrica, up 2.41 percent to 318.30 pence, and outsourcing specialist Serco, up 1.10 percent at 551 pence.
Britain’s unemployment rate fell slightly to 7.8 percent in the quarter to the end of September compared with 7.9 percent in the three months to the end of August, official data showed.
However, the Bank of England slashed its forecast for UK economic growth next year to about 1.0 percent, blaming the eurozone debt crisis.
GDP growth is now predicted in a range around 1.0 percent in 2013, down from the central bank’s previous forecast of around 2.0 percent, according to a fan chart in the central bank’s latest quarterly report.
On the currency markets, sterling weakened to $1.5854 at 5:21 pm from $1.5877 on Tuesday night and eased to 1.2443 euros from 1.2491 euros a day earlier.
London shares close lower on mixed earnings
