Gloomy consumer survey depresses FTSE

A gloomy consumer confidence survey and bad news from Asian markets served to pull the FTSE 100 Index downwards today.

A survey by GfK NOP revealed that consumer confidence showed its biggest drop in nearly 20 years between December and January as Britons faced up to the reality of higher VAT and public spending cuts.

Investors also reacted to lacklustre earnings in America and a credit-rating downgrade for Japan, as the Footsie dropped 45.5 points to 5919.5.

In Japan, the Nikkei 225 closed more than 1% lower after Standard & Poor’s lowered the country’s long-term sovereign debt rating one notch to AA- due to its ballooning public debt.

There was also uncertainty ahead of GDP figures in the United States, even though the world’s biggest economy is expected to show further momentum with fourth quarter output at an annualised rate of 3.5%.

Fourth quarter earnings in the United States provided little comfort for investors as Amazon.com missed Wall Street revenues targets, while Procter & Gamble and rival Colgate-Palmolive reported lower profits.

In London, miners also lost most of yesterday’s gains as further fears that China will hike interest rates to battle inflation played on the market. Fresnillo and Antofagasta were among the biggest fallers, down 50p to 1287p and 35p to 1405p respectively.

Shares in TUI Travel dropped 3%, down 9p to 262.9p, as traders monitored the civil unrest in Egypt, one of the travel industry’s leading destinations.

Pubs and brewing group Marston’s saw its share price drop 0.8p at 103p after the company reported strong trading figures for Christmas and New Year. The 11.2% rise in the 12-day period helped the Tavern Table owner to offset the impact of snow disruption at the start of December, while its operating margin was slightly better than a year earlier.

Fellow pub company and brewer Fuller, Smith & Turner was down 4.5p at 615p despite reporting that sales of its own-brewed beers including London Pride returned to growth.

But it echoed the sentiments in the consumer confidence survey when it warned that customers’ spending power was likely to be squeezed by the Government’s austerity measures.

Meanwhile, banknote printer De La Rue said supplies to a key customer were still suspended as it is yet to resolve talks over production problems five months after they first emerged. Its shares dipped 8p to 690.5p, or 1%.