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TUESDAY MARKET CLOSE: Growth warnings weigh on equities

  • by DOMINIC JEFF
 

Shares weakened as the OECD cut its world economic forecasts, casting doubt on the foundations of the recent global shares rally.

Traders were also flustered by US investment sage Carl Icahn’s warning of equity overvaluation. The FTSE 100 Index closed 25.45 points lower at 6,698.01.

Alastair McCaig, market analyst at IG, said: “Confidence is fickle, and markets found that precious commodity in short supply.”

Budget airline EasyJet was the highest flyer among the blue chips after unveiling plans to return cash to shareholders alongside a jump in profits. Its shares lifted more than 7 per cent to 1,345p. But with EasyJet boss Carolyn McCall saying she was still targeting passengers from the legacy carriers, BA and Iberia owner International Airlines Group was under pressure and slipped 8.5p to 353.5p.

Energy services firm Amec was on the up, adding 17p to 1,184p after it hailed a record £4 billion order book thanks to business in the North Sea and the US renewable energy market.

However, industrial stocks were struggling after Smiths Group could manage no more than an in-line update for its latest quarter of trading. Smiths itself was down 33p at 1,400p, while drinks can maker Rexam slipped 2.5p to 503.5p. Outside the top flight, Greenock-based plastics specialist British Polythene Industries slipped 7.5p at 730p.

Aberdeen Asset Management gave back some of its stellar gains from the previous session, down 3 per cent or 14.5p at 475.2. But there was to be no next-day rebound for oil services group Petrofac. It was down a further 23p at 1,177p as broker UBS slashed its profit forecast by almost a quarter in response to Monday’s warning over growth prospects for next year.

 

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