ECB jitters drives down blue-chips

Shrinking US manufacturing figures and nerves ahead of the European Central Bank’s key policy announcement tomorrow pushed the FTSE 100 index to its lowest level for a month.

The Footsie lost 1.5 per cent or 86.4 points yesterday at 5,672.01, amid continued bickering in Europe about the merits of a bond-buying programme from the ECB. US manufacturing figures didn’t help, shrinking for the third straight month as new orders, production and employment all fell.

Angus Campbell, head of market analysis at Capital Spreads, said: “It is an undeniable fact that global growth is slowing and, as a result, corporate earnings will be affected.

“As the FTSE 100 is so heavily laden with high-risk cyclical stocks that are exposed to the global economy it comes as no surprise to see that it is one of the worst-performing European indices.”

Tobacco firms came under pressure amid reports that Russia, the world’s largest tobacco market after China, will submit a law banning smoking in public places. British American Tobacco was 63p lower at 3,270.5p, while Imperial Tobacco was down 38p at 2,449p.

Royal Bank of Scotland was also among those struggling as Investec downgraded it, saying it was “throwing in the towel” with the company as an investment prospect in the face of a seemingly endless string of negative “one-off” hits to its profits. The bank’s shares were down 5.8p at 220.7p.

Petrofac featured on a shortened risers’ board, up 2p at 1,518p, after Credit Suisse upgraded its rating on the oilfield services group from “neutral” to “outperform”.

Outside the top flight, shares in Edinburgh-based software specialist Craneware jumped 10 per cent after it reported that profits rose by a third, and hiked its dividend. It closed up 32.5p at 360p.

NEW YORK: The S&P 500 closed slightly lower on Tuesday as investors continued to await clarity on ECB plans to shore up heavily indebted countries. The Dow Jones industrial average was down 54.90 points, or 0.42 per cent, at 13,035.94. The Standard & Poor’s 500 index was down 1.64 points, at 1,404.94. The Nasdaq Composite Index was up 8.09 points at 3,075.06.