Pressure on international markets

Stock markets remained under pressure on both sides of the Atlantic today amid fears over the health of the global economy.

Investors were spooked after the International Monetary Fund (IMF) warned the risks of a significant global slowdown were “alarmingly high”, followed by worse-than-expected UK economic data.

With the start of the US third quarter reporting season also weighing on minds, the Dow Jones Industrial Average on Wall Street dropped more than 20 points soon after opening while the FTSE 100 Index in London was 21.2 points lower at 5820.6.

Britain was facing a grim economic outlook after the IMF slashed its UK forecast and following news of a sharp reversal of fortunes for the manufacturing sector in August, as well as a widening trade deficit.

Among stocks, banking giant Barclays was firmly in the spotlight after it announced a deal to buy online bank ING Direct UK in a move that will add another 1.5 million customers to its retail arm.

Barclays shares rose 1.6p to 223.9p as analysts hailed the acquisition as a good “opportunistic” move.

Miners were on the front foot as hopes mounted for a further economic boost in China after the People’s Bank made its second largest ever daily injection into the money market to ease conditions.

The World Bank yesterday downwardly revised its growth forecasts for Asia and warned of the possibility of a “more pronounced slowdown” in China, the world’s second largest economy.

Vedanta Resources led the sector higher, up 31p to 1099p as it also reported robust second quarter production figures.

Retailers were given a fillip as figures from the British Retail Consortium (BRC) showed a sales rebound last month, up 1.5% on a like-for-like basis compared with a 0.4% drop in August.

Marks & Spencer rose 9.7p to 379.2p and Next lifted 30p to 3571p, while in the second tier Debenhams lifted 1.9p to 106.9p and Argos parent Home Retail Group added 4p to 98.3p.

Fund manager Schroders joined miners on the Footsie risers board after a broker upgrade saw shares rise 16.5p to 1548.5p.

But broker downgrades hit shares in outsourcing group Capita and temporary power supplier Aggreko, down 27.8p to 740.8p and 71.5p to 2247.5p respectively.

In the FTSE 250, a better-than-feared first quarter update from recruitment firm Hays helped the group march to the top of the risers board, up 5.8p to 81p.

While UK and Ireland net fees slumped by 9% in the three months to September 30, better performances in other global jobs markets limited the group’s overall decline in net fees to 1%.