London shares flat

London shares were flat today after a disappointing survey from the services sector showed growth slowed in June.

The latest knock to market confidence came after grim US unemployment data caused shares worldwide to slide on Thursday afternoon, with the FTSE 100 Index down by more than 2% last night.

The Footsie recovered some of its poise by mid-morning but was still off 3 points at 4231.2 after the Chartered Institute of Purchasing and Supply posted an activity index of 51.6 – down from the previous month’s 51.7 when the sector notched its first month of growth since April last year.

With little in the way of corporate news and US markets shut for Independence Day, traders were not expecting a surge in activity.

The worries over global economic growth were again reflected in trading for mining shares, with Kazakhmys down 19p at 627p and Vedanta Resources off 37p at 1351p.

Insurer Friends Provident led the fallers board, down more than 7% or 5.15p to 62.94p, as shares adjusted for the disposal of its majority stake in F&C Asset Management to its shareholders. The move will allow Friends to focus on the task of reviving its core business.

British Airways was expected to attract interest later in the session as the under-pressure company is due to post traffic figures for June. In the meantime shares rallied 1.6p to 120.6p.

Banks also featured on the risers board, with Barclays ahead 4.95p to 293.95p, HSBC 6.4p stronger at 506.7p and Lloyds Banking Group up 0.57p at 66.47p.

Royal Bank of Scotland surrendered early gains to slip 0.13p to 37.7p.

On a quiet day for corporate news, Balfour Beatty shares were 8.25p lower at 300p, even though the construction firm said it had been trading in line with expectations.