Markets: Early gains pared on downbeat data

Data from the US and an afternoon decision by the European Central Bank to keep rates on hold meant the FTSE 100 Index gave up early gains yesterday.

Michael Hewson, senior analyst at CMC Markets, said: “European markets had initially been trading positively with investors looking past concerns about sovereign finances after Spain and France managed to sell bonds, albeit at higher yields.”

But sentiment began to sour a little after US April service sector activity came in below expectations, he said, while hopes that the ECB might ease monetary policy were dashed.

The Footsie closed up just 8.4 points at 5,766.6.

Miners and oil companies weighed on the top flight after disappointing results from Antofagasta and BG Group.

Antofagasta was down 4 per cent or 51p at 1,108p, while BG shares lost 26.5p at 1,424.5p.

Randgold Resources was off 200p to 5,150p, despite posting a 126 per cent rise in annual profits. Investors chose to focus instead on the drop in quarterly revenues caused by the coup in Mali and issues at its Ivory Coast mining operation.

The sector falls weighed on Glasgow-based engineering firm Weir Group, which supplies the mining and oil firms. It saw shares slide 3.8 per cent to 1,616p despite a positive broker note from RBC saying that the market seemed to be pricing in cuts to forecasts in next week’s trading update. RBC said it thought it unlikely Weir would announce significant downgrades.

A note from Edison did help Alva-based medical kit maker Omega Diagnostics, which was up nearly 2 per cent at 13.75p after the commissioned researcher said a move to cut out the middle man in India would be worth about £270,000 a year to the Scottish firm.

New York: Wall Street fell last night as economic data sent mixed signals on the recovery a day before the April payrolls report, while shares of Green Mountain plunged after poor results.

The Dow Jones industrial average dropped 61.98 points, or 0.47 per cent, to 13,206.59 at the close while the broader Standard & Poor’s 500 Index fell 10.74 points, or 0.77 per cent, to close at 1,391.57. The Nasdaq Composite Index lost 35.55 points, or 1.16 per cent, to end on 3,024.30.