FTSE falls back amid uncertainty

The London market was on the back foot for the first time in a week today as investors took fright at weakness in the media and manufacturing sectors.

The FTSE 100 Index was down 19.8 points to 4899.1 by mid-morning after traders booked profits and also paused for the noon announcement on UK interest rates, which are widely expected to remain unchanged.

The mood was affected by a poor update from newly-merged radio company Gcap and worse-than-expected output figures from the UK industrial sector.

In an update that alarmed economists, the Office for National Statistics said manufacturing output slumped 1.6% between February and March.

Financial stocks were in focus after Barclays confirmed that it would buy a 60% stake in the leading retail lender in South Africa.

Shares in Barclays initially rose but were later 4p lower at 547.5p, despite the bank’s return to the country after an 18-year absence.

Among its major UK rivals, only HSBC was in positive territory – up 0.5p at 858.5p. Sliding into the red were Lloyds TSB, down 2p at 467.5p and HBOS off 7.5p at 796.5p.

Elsewhere, budget airline easyJet lifted more than 3% or 8p to 240p after it carried 25.2% more passengers in April compared with a year ago.

Takeover activity was also taking place in the radio sector where the Wireless Group added 2p to 90p after agreeing to be bought by broadcaster Ulster TV. UTV was unchanged at 493.5p.