Investors sought refuge in safer sectors today after figures showed the eurozone economy barely grew in the last three months of 2009.
The Footsie lost an initial rise of more than 40 points, to stand 21.3 points lower at 5140.2, as it emerged euro GDP rose 0.1% in the fourth quarter.
This was much weaker than expected and offset earlier cheer that Europe’s pledge to help debt-laden Greece will stave off a broader crisis. The Dow Jones Industrial Average closed 1% higher last night but was expected to fall today.
Fears over slower economic growth meant miners disappeared from the risers board, leaving Rio Tinto 3% or 87p lower at 3129p, Xstrata down 23p to 1007.5p and BHP Billiton off 23p at 1878.5p.
The flight from risk also put banks under pressure as Lloyds Banking Group fell 2.2p to 46p, Barclays dropped 10.4p to 257.9p and HSBC eased 11.1p to 645.9p. Barclays is due to post annual results on Tuesday.
Royal Dutch Shell also fell 8.5p to 1677.5p after oil prices dipped below 75 US dollars a barrel, reflecting fears that a weekly crude supply report could show sluggish US demand. BP bucked the trend with a gain of 2.4p to 577p.
There was a further blow to confidence after fast-fashion chain New Look abandoned plans for a stock market listing that would have raised £650m (€748.7m).
In the retail sector, Next rose 4p to 1924p and B&Q owner Kingfisher added 0.8p to 210.8p but Marks & Spencer dropped 2.9p to 329.1p.
With nervous investors retreating into safer-looking sectors, National Grid rose 16.5p to 641p, household products group Reckitt Benckiser lifted 75p to 3345p and GlaxoSmithKline added 16.5p to 1228.5p.
Two companies under pressure after results presentations were back on the front foot after heavy losses yesterday.
Telecoms group BT returned to positive territory – up 1.6p to 121.5p – after dropping 9% on Thursday due to the Pension Regulator’s “substantial concerns” about how the company plans to tackle its £9bn pension deficit.
British Airways, which also has a large pension fund shortfall, dipped 7.4p to 196.5p.
As well as BT, Diageo got a shot-in-the-arm after results yesterday showed a fall in half-year profits.
Shares recovered 23p to 1041p as Royal Bank of Scotland maintained a buy rating on the stock and said the Guinness-to-Smirnoff firm should benefit when consumer confidence starts to return.