FTSE firmly lower in midday trade as bad news accumulates

MIDDAY REPORT: Headline shares turned firmly lower by midday as bad news seemed to accumulate, with activity limited ahead of the long holiday weekend, and with Wall Street looking at a nervous start.

At midday, the FTSE100 was down 45.04 points at 5,275.82 with the FTSE250 off 163.6 points at 10,394.6 and the FTSE Smallcaps 6.28 points lower at 2,901.47.

NEW YORK

US stock futures tumbled ahead of payrolls and employment data, with investors ultra-cautious after falls in Europe.

Dow Jones Industrial Average futures dropped 100 points at 12,283, S&P500 futures lost 15 points at 1,293 and Nasdaq 100 futures shed 25 points at 2,498.

LONDON MARKETS

Activity was slow as many investors made an early start to the long Bank Holiday weekend.

Disappointing economic data from the US yesterday and reports of slowing manufacturing in China dampened enthusiasm this morning, while the BCC lowering its UK 2012 GDP growth forecast from 0.6% to 0.1% and a slump in UK manufacturing in May swept away any remaining bullish thoughts by midday.

However, US non-farms payroll data this afternoon could change the mood again.

Hedge fund manager Man Group topped the leaderboard at midday with a gain of 3.38p at 76.28p. The group is tipped to drop out of the blue chip index at the June review, with engineer Babcock the favourite to replace it.

Car insurance specialist Admiral rallied 10p at 1,049p as investors considered yesterday's tumble overdone.

Oil major BP was a major attraction after it said today it wants to sell its 50% stake in Russian joint venture TNK-BP, estimated to be worth up to $20bn. The oil producer said it has received unsolicited interest in the holding. BP shares jumped 10.45p at 405.35p on the news.

Airlines group IAG edged up 0.6p at 139.3p on confirmation of the sale of bmi Regional to Sector Aviation Holdings for £8m cash.

Investors turned their attention to utilities as a safe haven, boosting Severn Trent 25p at 1.746p, while United Utilities gained 5.75p at 662.75p and SSE added 12.5p at 1,335.5p.

Banks reversed early progress, with Barclays down 2.1p at 174.2p, Lloyds off 0.12p at 25.26p and Royal Bank of Scotland 0.03p lower at 19.95p.

Miners put in a miserable performance as metals prices slipped, with Fresnillo taking the blue chip wooden spoon, down 63p at 1,285p. Vedanta Resources fell 30.5p at 898.5p and Anglo American retreated 38.25p at 1,932.75p.

Telecoms giant BT Group eased 0.25p at 206.05p after it confirmed it has sold its French application development services business to Paris-listed Osiatis.

Ex-dividend factors took their toll, with industrial pump manufacturer Weir Group down 55p at 1,489p, chemicals group Croda International off 78.5p at 2,157.5p, and InterContinental Hotels Group, 24p lower at 1,502p.

Defence contractor BAE Systems lost 2p at 270.8p following yesterday's news it is closing its plant in Newcastle with a loss of 600 jobs.

Retailers struggled to keep the tills ringing, with luxury brand Burberry down 46p at 1,321p, DIY specialist Kingfisher off 6.2p at 275.8p, and frock shop chain Next 10p lower at 3,019p.

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