Markets: FTSE turns negative despite positives

POSITIVE news from the UK services sector and encouraging unemployment data in the US failed to keep the FTSE 100 in the black yesterday as the harsh reality of 2012’s economic climate caught up with traders.

Chris Purdy, of financial spread betting firm Spreadex, said: “The New Year corks have hit the floor and the fizzle seems to have turned into a hangover, as markets are unable to shake the European debt headache.”

The Footsie closed 44.19 points or 0.8 per cent lower at 5,624.26 as financial stocks fell on the back of fresh eurozone woes.

Banks were on the back foot, with Lloyds down 0.2p at 26.4p, Royal Bank of Scotland off 0.5p at 20.3p and Barclays 4.7p lower at 183.6p. HSBC was down 2.4p at 497.6p. Insurers also featured prominently on the fallers’ board, with Aviva off 5.5p to 303.5p and Standard Life 2.9p lower at 201.9p.

A positive broker upgrade helped temporary power supplier Aggreko carry on its good run of form. The Scottish firm put on 23p to close at 2,049p after Numis upgraded its earnings forecasts for the company, and moved its shares recommendation from “reduce” to “buy”.

It said: “Having been cautious on the shares since mid-2010 we are now turning more positive as we believe the group’s competitive advantages of scope and scale of operations are set to continue to deliver the most potent combination for investors of high return on capital and high growth.”

On continental markets, Swiss oil refiner Petroplus saw shares tumble 23 per cent as lenders extended the freeze on its borrowing to all credit lines, on top of $1 billion (£645 million) choked off last week.

NEW YORK: Wall Street ended mostly higher last night, led by gains in banks even as Europe struggled again, a sign investors are betting a relatively strong US economy will help US stocks beat other markets.

The Dow Jones industrial average was down 3.10 points, or 0.02 per cent, to close at 12,415.32 while the broader Standard & Poor’s 500 Index closed up 3.74 points, or 0.29 per cent, at 1,281.04. The Nasdaq Composite Index rose 21.50 points, or 0.81 per cent, to end the day at 2,669.86.