FTSE down almost 50 points

The FTSE 100 Index lost hold of early gains by midday today as investors continued to fret about recovery prospects for the world economy.

FTSE down almost 50 points

The FTSE 100 Index lost hold of early gains by midday today as investors continued to fret about recovery prospects for the world economy.

The uncertainty was fuelled by signs earlier this week that policymakers at the Bank of England and US Federal Reserve have moved closer to taking additional measures such as more quantitative easing.

The flight to safety was reflected in the risers board in London, which featured a number of traditionally defensive stocks such as Imperial Tobacco and utility firm Scottish & Southern Energy.

Overall, the FTSE 100 Index slipped 48.1 points to 5503.8 after opening in positive territory earlier in the day.

The session was hampered by a lack of direction from Asia as markets in Japan, mainland China, Hong Kong and South Korea were closed for public holidays.

Gold remained near a record high at $1,300 (€975.45) an ounce but the elevated price of the base metal was not enough to stimulate further gains for Randgold Resources and Africa Barrick Gold - unchanged at 6490p and down 3p at 598p respectively.

Other fallers included stocks in the banking sector, with Lloyds Banking Group off 1.6p to 74.2p and Standard Chartered 38.5p lower at 1835.5p.

Shares in British Airways opened the session higher after the Spanish airline Iberia approved BA's plan to deal with a £3.7bn (€4.35bn)pension deficit.

Iberia had the right to pull out of a merger between the two airlines if it thought the outcome of discussions between BA and its pension trustees could damage the value of the deal. Shares were later 0.9p lower at 239.1p.

Outside the top flight, pubs chain Mitchells & Butlers improved 3.4p to 297.7p after its food-led trading strategy helped produce a 3.6% rise in like-for-like sales in the nine weeks to September 18.

It also reported an improved trend for margins as part of a performance described as encouraging by management.

Nightclub operator Luminar suffered another share price slump after revealing sales were down by 20% over the summer.

Trading has suffered due to the impact of youth unemployment and the distraction of the World Cup but the Oceana and Liquid owner said it continued to trade within the terms of its banking agreements.

This failed to satisfy investors as shares fell 2.5p to 13p, having already lost more than 90% of their value in the last year.

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