FTSE loses ground

The FTSE 100 Index dipped into the red today despite economic cheer in America.

Figures confirmed the US economy shrank at an annual rate of 1% in the second quarter, confounding expectations for a revision down to 1.5%.

But the Dow Jones Industrial Average on Wall Street failed to take comfort, down 0.5% in early trade, with London's Footsie also in the red, closing 21.2 points down at 4869.4.

Investors have paused for breath over the past two sessions after a recent strong run that has seen the FTSE 100 enjoy its best summer rally since launch in 1984.

However, mining heavyweight Kazakhmys was one of those making headway after first-half results topped market forecasts.

The company also surprised investors by revealing it was on course to exceed its annual copper production target, sending shares up 19.5p to 937p.

More defensive stocks likewise came to the fore as investor sentiment appeared to be shifting.

Utility firms rose, such as Centrica, with a 7.2p rise to 246.3p, while pharmaceutical giants were also ahead, led by GlaxoSmithKline, which added 12p to 1212.5p.

Royal Bank of Scotland, which set a nine-month high last night, failed to hold on to initial further gains after an upgrade from broker KBW.

Shares later slipped 1.05p to 55.55p, with Lloyds Banking Group also down, by 3.77p to 104.7p and Standard Chartered eased 38p to 1376p.

Guinness maker Diageo was lower - down 4% or 40.5p to 956p - after it forecast a challenging 2010 and predicted slower profits growth in the year ahead. Results for 2009 were at the lower end of expectations with profits of £2bn (€2.26bn).

Engineering services firm Amec was another casualty on a busy day for corporate results, as shares fell 31p to 746.5p after the company reported a 4% drop in pre-tax profits due to difficult trading conditions.

One of the biggest gains in the FTSE 250 Index came from transport group National Express after it revealed an improved takeover offer from a consortium featuring its biggest shareholder.

The company is mulling the new approach, as well as its own proposals to raise money from shareholders in a rights issue. Shares were up 2% or 8.6p to 408.6p, but rival Arriva fell 13.6p to 477.4p after reporting a decline in rail profits for the first six months of the year.

Property services firm Savills suffered an 8% drop, down 30.3p to 339.7p, after reporting a sharp drop in half-year profits and announcing a cut in its dividend. The slump came despite signs of improved trading conditions in its key London market.

UK Coal was another faller, down 4.5p to 122.5p, after it said production for the year was likely to be marginally lower than it forecast a month earlier. It said long-term prospects were positive, despite half-year losses of £81.5m (€92.5m).

The biggest Footsie risers were Smith & Nephew up 23.5p at 533.5p, Invensys ahead 9.6p at 271.5p, Centrica up 7.2p at 246.3p and Kazakhyms up 19.5p at 937p.

The biggest Footsie fallers were BAE Systems down 18p at 306p, Diageo off 40.5p at 956p, Xstrata down 33.5p at 792p and Amec down 31p at 746.5p.