Markets: FTSE slips as fiscal cliff looms again

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Concerns that crucial budget talks in the US have stalled saw early gains erased in London as trading drew to a close, marking a subdued end to an otherwise positive month.

The FTSE 100 index closed 3.5 points lower at 5,866.8, as gloomy news from closer to home also affected sentiment, with the unemployment rate across the eurozone hitting a record high of 11.7 per cent.

Consumer spending in the US also fell, down 0.2 per cent in October – the first decline for five months – with superstorm Sandy taking some of the blame, but American minds are also focused on the “fiscal cliff” of tax rises and spending cuts, which threatens to hit the economy unless President Obama can agree a deal with Republicans.

Chris Beauchamp, market analyst at IG, said: “It is often the case that markets rally in the final month of the year, but this time the going might be trickier if we have a potential crisis waiting for us in the new year.”

In a quiet day for corporate news, Royal Bank of Scotland fell 3.8p, or 1.3 per cent, to 295.2p after its deal to sell its Indian banking operations to HSBC collapsed. HSBC itself gained 6.1p, or 1 per cent, to 637.7p.

A broker downgrade from UBS in the wake of Thursday’s results saw B&Q-owner Kingfisher dip 1p to 278p, while Perth-based transport giant Stagecoach edged forward 1.5p to 292.5p ahead of next week’s first-half results.

Craneware, the hospital software specialist, dipped 0.25p to 464.75p, despite news that Axa Investment Managers had lifted its stake in the Edinburgh firm to almost 5.9 per cent.

Online gambling outfit Sportingbet fell 1.5p, or 3.3 per cent, to 44.5p after it said a lack of sport fixtures had triggered a sharp drop in Q1 revenues.

NEW YORK: The S&P 500 wrapped up its second positive week in a row last night, although it ended the day flat as politicians remain at odds about how to avoid the “fiscal cliff”.

The Dow Jones industrial average rose 3.22 points, or 0.02 per cent, to finish at 13,025.04 while the Standard & Poor’s 500 Index inched up just 0.30 of a point, or 0.02 per cent, to end at 1,416.25. But the Nasdaq Composite Index dipped 1.79 points, or 0.06 per cent, to close at 3,010.24.