FTSE in doldrums

The FTSE 100 Index ended Wednesday in the doldrums after a poor start on Wall Street compounded the gloom in London.

The Footsie added to earlier losses to finish the session 17 points off at 4875.4.

The Dow Jones Industrial Average fell 50 points to 10230 in early trading after a fall in the US trade gap sparked fears of fresh US interest rate rises.

The drop to $55bn (€43bn) from a high of $60.6bn (€47.3bn) dollars in February – the narrowest deficit for six months – failed to allay investors’ fears about slowing economic growth.

Back in London, prospects of another interest rate hike ebbed away after the Bank of England said it believed inflation would meet the Chancellor’s target within the next couple of years.

Analysts said the Bank’s forecast that inflation would rise above target before easing back to the intended level of about 2% alleviated some concerns about a UK economic slowdown.

However, that news did little to offset the negative impact of a clutch of leading stocks going ex-dividend, leaving investors without the right to the latest payment. Positive retail news from electrical retailer Dixons also left dealers unimpressed.

Dixons headed the Footsie risers, advancing nearly 3% or 3.75p to 145.25p on news that a 2% decline in like-for-like sales in the UK was less than many analysts feared.

Other retailers on the up included Argos owner GUS, gaining 10.5p to 836p, Tesco adding 2.5p to 311.5p and Boots Group advancing 1.5p to 591.5p.

Computing group Sage was fourth in the risers after ABN Amro lifted its price target on the stock to 230p from 215p. The shares gained 3.25p to 205.25p.

However, steel giant Corus came second in the Footsie fallers board as it continued a bad run that had seen its shares lose nearly a third of their value since mid-February. It weakened nearly 3% or 1.25p to 43.25p today.

Market heavyweights Shell, BP and BG Group joined it on the way down after the trio went ex-dividend, causing shares to drop 6.5p, 9.5p and 6.25p to 471p, 537p and 413.75p respectively.

A broker downgrade reduced shares in supermarket group Morrisons by 3.75p to 190.5p.

Elsewhere, ports and shipping group P&O lifted 0.75p to 278p after the terms of a €2.3bn (£1.57bn) takeover of container shipping group P&O Nedlloyd by larger rival Maersk were unveiled. P&O retains a 25% stake in P&O Nedlloyd.

Rail and bus operator FirstGroup drove 6p ahead to 326p after it reported a 35% increase in train profits and benefited from a broker upgrade.

But sportswear retailer John David Group dropped more than 5% or 12.5p to 218.5p after its founders agreed to sell their shares at an 8.5% discount and quit the firm.

Biggest risers were Dixons up 3.75p to 145.25p, Land Securities gaining 33p to 1352p, Capita lifting 6.5p to 383.5p and Sage Group adding 3.25p to 205.25p.

Largest fallers included Antofagasta, down 53p to 1102p, Corus off 1.25p to 43.25p, Xstrata losing 24p to 914p and Emap weakening 16.5p to 751p.