FRIDAY MARKET CLOSE: US GDP miss sends shares tumbling

Markets ended a good month on a sour note. Picture: AP
Markets ended a good month on a sour note. Picture: AP
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News of better consumer sentiment in the UK couldn’t compete against disappointing US GDP figures and worse-than-expected eurozone inflation as markets ended a good month on a sour note.

The FTSE 100 reversed early gains to close 61.2 points lower at 6,749.4, despite a rebound in the beleaguered commodities sector.

Tony Cross, market analyst at Trustnet Direct, said: “The US fourth-quarter GDP reading injected a degree of panic after it came in well below expectations, proof that tanking oil prices are taking a toll and the upshot has been a degree of defensive buying with gold finding favour as a safe haven.”

As a result Randgold Resources headed up the risers’ board, adding almost 5 per cent to 5,685p, and Fresnillo wasn’t far behind. It added just over 4 per cent at 899p.

However, BT dominated a disappointing session after the telecoms giant revealed its pension deficit had swollen to £7 billion. The disclosure prompted BT to announce a 16-year recovery plan and shares fell more than 2 per cent, down 11.2p to 417.9p, even though it beat City expectations with third-quarter profits.

International Airlines Group was on the back foot despite an initial round of buying following a move by Qatar Airways to acquire a stake of almost 10 per cent in the British Airways owner for more than £1bn.

The stock opened 2 per cent higher but interest faded after IAG chief executive Willie Walsh described Qatar as a long-term shareholder. The Gulf carrier is also prevented from tabling a takeover approach because rules stop non-EU shareholders from owning more than 49 per cent of European airlines.

IAG shares ended up 19.5p lower at 544.5p as attention turned to potential difficulties in gaining clearance for the airline’s takeover of Aer Lingus.