FTSE down more than 1%

Disappointing economic readings in the US sent London's FTSE 100 Index into the red today after a poor final session of the second quarter.

Disappointing economic readings in the US sent London's FTSE 100 Index into the red today after a poor final session of the second quarter.

Early falls on Wall Street saw a late session turn for the worse on the Footsie, which closed down more than 1% with a fall of 44.8 points to 4249.2.

Figures showing an unexpected dip in US consumer confidence sparked the sell-off on both sides of the Atlantic.

There was also bad news on the economy on these shores, after revised figures revealed a 2.4% slump in first quarter GDP - the worst rate since 1958.

The downward revisions also showed that the recession is steeper and longer than first thought, seen as a potential blow to recovery hopes.

The FTSE 100 has rallied from its lows in March, but still remains below its opening mark for the year as worries over the pace of economic recovery have caused a stuttering performance in recent weeks.

Dampened economic hopes saw miners hit hardest in afternoon trade on the back of sharply lower commodity prices. Randgold Resources led the way, down 127p at 3924p.

Standard Chartered was also among the heavy fallers, down 35p to 1140p, bucking the trend seen by rivals such as Barclays, up 3.35p at 283p.

BA was another stock in the red with a 2.8p fall to 124.7p as reports suggested crucial talks with unions aimed at reaching agreement on cost cutting were heading for a breakdown.

But much of today's session was again on the transport sector after Arriva warned revenues from its CrossCountry franchise were under pressure.

Shares fell 4%, or 16p to 406p, but in contrast shares in National Express saw another 2% rise, up 6.75p to 309.5p, after FirstGroup yesterday confirmed its takeover interest in the rail and coach operator.

The housebuilding sector was given a lift after the Nationwide said prices rose for the third time in four months during June. This was enough to lift Taylor Wimpey by 0.25p to 33.5p and Barratt Developments by 0.5p to 147.5p.

Carpetright failed to benefit from the better consumer sentiment as the floor coverings firm reported annual results at the bottom of market expectations. Shares dropped 6% or 37p to 561p after the company also revealed a sharp cut in its full-year dividend.

Directories firm Yell was the biggest faller in the FTSE 250 Index after it forecast another grim quarter of trading and said it was in talks with lenders about refinancing its £3.5bn (€4.1bn) debt pile.

There were no details on the plans, but the City was pessimistic about the potential impact on investors as shares tumbled 15% or 4.5p to 26.25p.

Also in the second tier, retail chain HMV saw shares fall 6p to 112.75p despite reporting pre-tax profits for the year to April 25 up 11.5% at £63m (€73.9m), slightly ahead of consensus forecasts.

The biggest Footsie risers were Wolseley up 32p at 1158p, Thomas Cook ahead 5.6p at 205.5p, Icap up 11p at 451p and Amec up 13p at 653p.

The biggest Footsie fallers were Randgold Resources down 127p at 3924p, Schroders off 26p at 820.5p, Standard Chartered down 35p at 1140p and Man Group down 8.5p at 277.5p.

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