Markets: US news proves a drag on Footsie

News of a slowdown in US economic growth held back progress on the London market yesterday, in the final session before today's royal wedding and Monday's bank holiday.

Official figures showed the US economy grew at a 1.8 per cent annual rate in the first quarter - the weakest result since last spring and a sharp slowdown on the previous three months.

In London, the FTSE 100 edged up just 1.74 points to 6,069.9. David Jones, chief market strategist at IG Index, said: "Rather than cheering Wednesday night's gains from Wall Street, we had a relatively relaxed unwinding into the second successive long weekend."

In contrast, the FTSE 250 index reached its highest close since June 2007, up 118.86 points, or 1 per cent, at 12,013.88.

Markets in France and Germany also made robust gains after investors drew comfort from Wednesday night's assurances by the US Federal Reserve that the recovery of the world's largest economy remained on track.

The Dow Jones Industrial Average also tentatively held on to Wednesday's gains in early trading following the Fed's decision to keep interest rates on hold. Sterling remained near a 17-month high against a weakened dollar, at $1.66.

With US interest rates unlikely to change for some time, the weaker dollar made commodities such as crude oil cheaper for investors with other currencies. Brent crude was still near recent highs at $125.69 a barrel.

But rising oil prices were not enough to save BP from finishing on the fallers' board after its results on Wednesday compared unfavourably with figures from rival Shell yesterday.

Shell rose 10p to 2,327p, after beating forecasts with a 30 per cent jump in first-quarter profits, but BP dipped 3.5p to 462.6p after its 2 per cent drop in first-quarter profits. There were disappointing updates from the likes of Unilever and AstraZeneca, which kept the market under pressure.

Consumer goods giant Unilever fell 48p to 1,942p, after it said sales increased by 7 per cent to €10.9 billion (9.7bn) in the first quarter of 2011, but added that margins were under pressure due to rising costs.

Drugs heavyweight AstraZeneca fell 3.5 per cent or 107.5p to close at 2,990p after a bigger-than-expected 3 per cent fall in first-quarter sales.

Leisure group Whitbread was another heavy faller, down 3 per cent, after its guidance on recent like-for-like sales overshadowed full-year results showing a 20 per cent rise in underlying profits to 287.1 million. Shares declined 57p to 1,680p.

On the risers' board, advertising giant WPP gained 3 per cent after the company raised its guidance for 2011 trading on the back of better-than-expected revenues in the UK and US.Shares were up 22p to 781.5p.

Edinburgh-based Standard Life was another riser - 7p or 3.2 per cent ahead at 226.1p - after the insurer posted a stronger-than-expected 25 per cent leap in sales for the first quarter.

Outside the top flight, Perth-based transport group Stagecoach rose 10.4p to 246.9p after it said the overall profitability of the business remained strong.

On its first day on Aim retailer JJB Sports was down 1p at 26p.