FTSE retreats

The London market retreated back below the 6600 barrier today on the back of concerns China’s over-heating economy is heading for a fall.

The FTSE 100 Index stood 16.8 points down at 6599.6 by mid-morning, recovering only some of the lost ground seen earlier as investors remained cautious following former US Federal Reserve chairman Alan Greenspan’s forecast of a “dramatic contraction” in Chinese markets.

Insurer Royal & Sun Alliance was among the session’s biggest fallers as its plans to buy up the remaining shares in Danish life insurer Codan sent the stock down more than 4%, or 6.9p, to 162.8p.

The concerns over China’s economy saw miners litter the fallers’ board, with Vedanta off 20p at 1485p, or 1%, followed by Xstrata, which was down 26p at 2799p, also a 1% drop, while Lonmin was down 39p at 3946p.

Supermarket chain Morrisons also slipped 1.25p to 319.25p as the company unveiled modest like-for-like sales growth of 4% in the past 15 weeks, and ruled out a sale of its property portfolio.

With few stocks in positive territory, telecoms firm Cable & Wireless topped the Footsie risers after the group announced a sharp rise in pre-tax profits to £249m and progress in the turnaround of its UK operation, lifting its shares 8.8p higher at 195.5p.

Vodafone followed close behind up 3p at 152.9p, or 2%, amid positive broker forecasts for the group’s full year results out next week.

The mobile phone giant is set to reveal a “robust performance” in its key markets, according to Lehman Brothers.

Meanwhile credit checking group Experian gained 10.5p to 609.5p after a broker upgrade following healthy full-year results in the previous session, while sugar and starch group Tate & Lyle moved 9p ahead at 614p as the firm made a modest recovery from yesterday’s losses.