Markets: US jobless news fails to lift the FTSE

LONDON FTSE 100 CLOSE 5,847.92 -80.69

LONDON'S Footsie slumped further into the red yesterday after better-than-expected jobs figures in the United States failed to overcome persistent fears over the global recovery.

The FTSE 100 index dropped 1.4 per cent or 80.69 points to close at 5,847.92 following news that first-time applications for unemployment in America benefits fell to 422,000 last month.

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While the figure beat analysts' forecasts, it still represented a rise over the previous month. The data followed poor manufacturing reports from the US on Wednesday, which had sent the Footsie down 1 per cent.

A separate report yesterday suggested US workers were less productive in the first three months of 2011 compared with the end of last year as economic activity slowed.

David Morrison, market strategist at GFT Global, said: "The data over the past few days has been shockingly bad. A lot of people are now wondering whether there is any sort of recovery going on, which has put the mockers on equities."

Credit ratings agency Moody's again downgraded its view on Greece's debts, cutting its rating by three notches from B1 to Caa1 - just five notches short of the level expected for a default.

The euro strengthened, however, after European Central Bank president Jean-Claude Trichet called for much tougher fiscal intervention within the eurozone. The pound was down against the single currency at €1.13 and was also down against the dollar at $1.63.

The weak economic outlook led traders away from riskier assets - with weighty mining stocks losing around 2 per cent.

Leading the sector lower was copper giant Antofagasta, down 40p at 1,269p, while Rio Tinto was off 112.5p at 4,142.5p and silver miner Fresnillo dropped 50p to 1,428p.

The British banking sector was hit by Moody's Greek debt downgrade, with Barclays off 3.95p at 265.7p, Lloyds Banking Group dropping 1.5p at 48.5p and Royal Bank of Scotland down 0.1p at 41.8p.

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Chip designer ARM Holdings was hit by the fears over global growth - despite Microsoft unveiling its Windows 8 software, which will be run on portable tablet computers powered by ARM chips. Shares in the British firm fell 0.5p to 571p.

B&Q-owner Kingfisher produced one of the biggest falls in the top flight, even though its first-quarter profits impressed analysts after the April sunshine and run of bank holidays boosted demand. Shares were 3 per cent lower, off 2.8p at 279.3p.

The market was similarly unimpressed by another strong set of results from online retailer Asos.

The company reported a 41 per cent rise in underlying profits to 28.6 million - which was in line with expectations - after strong overseas trade, which accounted for 43 per cent of its 324m in sales in the year to 31 March.Shares dropped 8 per cent or 194p to 2,144p.

Among the Scottish stocks, Edinburgh-based hospital billing software firm Craneware edged up 3.25p to end the day at 545p after holding a presentation for investors and analysts and revealing that it had won a further contract with a large clinic in the US. But the company did not give an update on its current trading performance.

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