FTSE falls after World Bank warning on global growth

Monday 8 October 2012

London's leading shares index retreated today after the World Bank sounded the alarm over global growth prospects with a warning over Asia's economy.

The FTSE 100 Index closed 29.3 points lower at 5841.7 after the World Bank 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.

The warning hit sentiment around the world with Wall Street's Dow Jones Industrial Average down 0.4% at the time of the London close, while the Dax and Cac in Germany and France respectively were down by more than 1%.The pound was down against the US dollar at 1.60 as the greenback was boosted by its perceived safe-haven status. It was also down against the euro at 1.23.There were only a handful of risers in the top flight, with copper miner Evraz leading the fallers board with a decline of 4% or 9.4p to 244.7p.Corporate updates did little to lighten the mood after profit warnings from materials business Cookson, whose shares slid 12%, and recruitment firm Michael Page International.Industrial firm Cookson, which makes the pipes and valves that control molten steel as it flows through steel mills, said the core markets in its engineered ceramics division were bearing the brunt of the global economic downturn.The FTSE 250 Index company warned that full-year results will be materially below its previous hopes, triggering a slide in its stock market value to £1.5 billion after shares fell 76p to 539p.Morgan Crucible, which also makes ceramics products for industrial use, fell 8%, down 21.7p to 257.8p, in the wake of the Cookson warning.And the poor economic conditions left their mark on Michael Page International after it said full-year operating profits were likely to be slightly below current market forecasts of just under £68 million.It reported third quarter profits of £126.5 million, down 8% on the previous three months, while it said it did not expect a pick-up in trading conditions for the foreseeable future.Shares fell 4% at one stage but were later 2.1p lower at 363p, while rival Hays dropped 3% or 2.5p to 76.15p ahead of its own update tomorrow.FirstGroup shares continued to suffer in the wake of the Department of Transport's decision to pull the award of the West Coast franchise.The removal prompted Deutsche Bank to reduce its full-year forecasts for this and next by 5% and 16% respectively, adding that it would maintain its sell recommendation. Shares fell another 3%, off 2.7p to 190.8p, compared with 244p prior to the shock announcement last week.The biggest Footsie risers were Morrisons up 5.7p at 283.9p, Hargreaves Lansdown ahead 6p at 672p, Carnival up 16p at 2376p and Tesco ahead 2p at 317.4p.The biggest Footsie fallers were GKN down 9.4p at 216.9p, Evraz off 9.4p at 244.7p, Melrose down 8p at 238.4p and Croda International off 73p at 2290p.

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FTSE falls after World Bank warning on global growth

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