World markets subdued

World markets subdued

Fresh signs of a global economic slowdown and fading hopes of imminent stimulus measures left world markets subdued today.

The US Commerce Department said orders for long-lasting factory goods, such as computers and industrial machinery, fell slightly in July, fuelling fears that growth in the world's biggest economy is stuttering.

The FTSE 100 Index had been down much of the day but benefited from a late rally to close flat at 5776.6 points, helped by a 4% surge in Marks & Spencer shares amid rumours of a private equity buy-out.

London's top flight has fallen more than 1% this week amid worrying economic data, including a slight rise in US unemployment benefits, disappointing manufacturing data from China and a grim survey suggesting the eurozone is headed for another recession.

Meanwhile, hopes of imminent stimulus measures suffered a blow after the president of the St Louis Fed said further action may be unnecessary despite signs US growth is slowing.

There was some mixed economic news for the UK today after GDP figures for the second quarter of 2012 were revised up to a 0.5% contraction, compared with a previous estimate of a 0.7% fall.

But London's leading shares index failed to receive a boost because the figures were in-line with City expectations and highlighted other worrying trends such as a fall in consumer spending and business investment.

The GDP data saw the pound fall slightly on currency markets. Sterling was at 1.58 against the dollar and off at 1.26 against the euro.

In the eurozone, Greek Prime Minister Antonis Samaras' meeting with Angela Merkel to ask for more time to make budget cuts failed to produce a result after the German Chancellor said she would delay a decision until after an official report next month.

The Dow Jones Industrial Average was up 0.5% as the London market closed, while Germany's Dax was slightly higher and France's Cac-40 was flat.

In a quiet day for corporate news, Marks & Spencer's shares rose 15.2p to 371.7p amid speculation that CVC Capital Partners is eyeing a bid for the struggling high street bellwether.

Miners were again under pressure, with Eurasian Natural Resources dropping 12.6p to 338.9p.

The biggest Footsie risers were Marks & Spencer up 15.2p at 371.7p, Smith & Nephew ahead 10p at 668p, Reckitt Benckiser up 53p at 3615p, Standard Chartered ahead 18.5p at 1413p.

The biggest Footsie fallers were Ashmore down 15p at 331.5p, Eurasian Natural Resources off 12.6p at 338.9p, Evraz down 7.8p at 246.8p, and Kazakhmys off 20p at 660.5p.

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