London’s leading share index fell into the red today despite figures confirming a stronger-than-expected economic recovery in the final quarter of 2009.
Positive economic news in America also failed to lift shares, with bank stocks acting as a drag on both sides of the Atlantic.
The FTSE 100 Index closed 38.3 points down at 5672.3, with little cheer offered from news that fourth-quarter UK output was upgraded from 0.3% to 0.4%.
Banks weighed on the Footsie after it was revealed that Royal Bank of Scotland was facing a £28.6m (€32.2m) fine from the Office of Fair Trading for revealing loan prices to rival Barclays two years ago.
Market experts said the sector was also coming under pressure following yesterday’s announcement that the US Government is looking to sell its massive holding in Citigroup.
Joshua Raymond, market strategist at City Index, said: “The fear is that the UK government, having seen equities rally enormously since the low of March in 2009, may now also be tempted into cashing in their stakes in Lloyds or RBS.”
On Wall Street, stocks fell in spite of economic data showing US house prices saw their smallest annual decline in three years during January, while consumer confidence also grew more than expected in March.
But mining stocks were among those making gains in London as a weaker dollar pushed up commodity prices. Sterling edged near £1.51 against the greenback. The pound also rose to €1.13.
Engineering and project management company Amec topped the Footsie risers board after it announced the acquisition of environmental consultancy firm Entec Holdings for £61.2m (€68.8m).
Its shares rose 24.5p to 790.5p, a gain of more than 3%.
Mobile phone giant Vodafone also continued to rise on speculation that it may soon gain dividends from its stake in US firm Verizon Wireless. Shares were up 1.1p to 152.2p after hitting a 21-month high earlier in the session.
The fallers board was littered with banks, led by RBS with a 1.5p drop to 43.3p after details of its OFT fine.
Barclays, which avoids a fine for being the whistleblower, was 8.9p down at 358p.
British Airways meanwhile shed 6p to 245p after it revealed a £5.5m (€6.2m) a day loss at the weekend due to the latest cabin crew strike, which ends today.
Outside the top flight, Domino’s Pizza continued to impress investors after it reported like-for-like sales growth of 10.5% in the 13 weeks to March 28, despite many stores being forced to close by the winter weather. Shares lifted 10.5p to 345.5p.
Meanwhile, Punch Taverns shares were 3% higher – up 2.75p to 84p – after the company announced the departure of chief executive Giles Thorley following nine years at the helm of Britain’s biggest pubs chain.
The biggest Footsie risers were Amec up 24.5p at 790.5p, Legal & General ahead 0.95p at 88p, Schroders up 14p at 1414p and United Utilities up 5p at 567p.
The biggest Footsie fallers were Inmarsat down 45p at 752.5p, Investec off 21p at 541p, Royal Bank of Scotland down 1.5p at 43.3p and Standard Life down 6.5p at 202.1p.