Markets: Global gloom sees FTSE slump further

Leading shares sank for a ­second session in a row yesterday, with the London market hitting a one-month low on weak ­United States’ economic data and the absence of fresh stimulus measures from the ­European Central Bank (ECB).

The ECB kept policy on hold at its monthly meeting, disappointing minority bets for an interest rate cut. Closer to home, the Bank of England also sat on its hands amid mixed signals on the state of the UK economy.

Across the Atlantic, news of a rise in weekly US jobless claims pointed to a below-forecast reading in today’s key non-farm payrolls data.

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The Footsie closed down 76.16 points or 1.2 per cent at 6,344.12, its lowest finish since 4 March.

Max Cohen, financial sales trader at Spreadex, said: “Markets have retreated on the back of disappointing US figures and a less than inspiring speech from ECB president Mario Draghi. A sense that the recent US recovery is not as strong as originally thought is beginning to grow.”

Shares in Edinburgh-based Cairn Energy dipped 0.7p to 275p as broker Numis Securities pointed out the company is now worth less than the cash and investments on its books.

Numis analyst Sanjeev Bahl said the market appeared to be pricing-in a failure of the company’s expensive exploration plans and recommended buying into Cairn ahead of three low-risk wells being drilled this year.

“Value creation from these three events could add up to 20p a share but, more importantly, has the potential to change investor sentiment,” he said.

Just 15 stocks in the top flight managed to record gains, with miners proving rare winners. Vedanta Resources was the biggest riser on the FTSE 100, up 6 per cent or 61p to 1,070p.

It was joined on the risers’ board by Royal Bank of Scotland, up 3.3p to 274.4p as it shakes off concerns about a potential £4 billion court case being pursued by investors.

Stocks rose in New York yesterday after the Bank of Japan announced aggressive, market-lifting policies to jump-start its economy, but weak jobs data capped gains. The Dow Jones industrial average rose 55.76, or 0.38 per cent, to 14,606.11, with most US indices edging up on the expectation of increased business activity.