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Fears of global slowdown hit Footsie

FRESH fears of a slowdown in the world's biggest economy triggered a sell-off that wiped 1% off London's leading shares index yesterday.

Orders for durable goods in the US rose 2.2% last month but came in way below City expectations, adding to worries that the country's recovery is running out of steam.

The FTSE-100 index fell 60.56 points to 5808.99, while the US Dow Jones industrial average was down 0.5% as the London market closed. The Dax in Germany and the Cac-40 in France both fell around 1%.

The latest weak data from the US follows disappointing consumer confidence and home sales reports on Tuesday, which led to falls in Asian markets overnight. There were also renewed concerns about the eurozone debt crisis after figures suggested Spain's economy had entered recession for the second time in three years.

To add to the gloom, revised figures from the Office for National Statistics showed the UK's economy contracted by 0.3% in the final quarter of 2011 – worse than the 0.2% previously estimated – after a decline in the powerhouse services sector.

The revision caused the pound to slip on currency markets. It was down against both the dollar and the euro at 1.59 and 1.19 respectively.

The heavily-weighted mining sector bore the brunt of the sell-off, with Vedanta Resources 72p lower at 1232p, Evraz off 21p at 359.8p and Antofagasta down 64p at 1118p.

Insurers were among the biggest fallers after Lloyd's of London reported a £516 million loss following a spate of natural disasters including floods in Australia and Thailand, an earthquake in New Zealand and the tsunami in Japan.

RSA was the biggest top flight loser, off 7.5%, or 8.7p, at 107.1p, while Prudential gave up 29p to 768.5p.

Outside the top flight, tour operator Thomas Cook lost earlier gains after it said summer bookings had improved in the last few weeks thanks to improvements to websites and a new advertising campaign. The shares fell 0.5p tot 22.8p and are now some 90% lower than they were a year ago.

Floor tiling retailer Topps Tiles said trading declined but it plans to open six stores more than it closes in coming months. Shares fell 1.8p to 38p.

Takeaway giant Domino's Pizze was down 5% after it revealed a slowdown in sales growth in the first three months of the year.

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