City slips as early hit by US industrial output fall

BLUE-chip shares were little changed on Friday as London’s top-flight gave up early gains to end an anxious week below the 7,000 mark.

The FTSE 100 Index fell 12.55 points to 6960.49, meaning it was nearly 90 points off its closing level last Friday, when markets had been buoyed by the unexpected Conservative election victory.

This week fortunes have fluctuated with a renewed focus on the potential for higher borrowing costs caused by a period of turbulence in bond markets.

The FTSE 100 had nosed above 7000 earlier in Friday’s session after European Central Bank president Mario Draghi pledged that the region’s quantitative easing policy would continue for as long as needed.

But markets turned downwards after US data showed industrial output fell for the fifth straight month in April.

In New York the Dow Jones Industrial Average was a little lower while Germany’s Dax and France’s Cac 40 suffered steeper declines.

On currency markets, the pound failed to gain ground against the US dollar after UK data showed the construction sector shrank in the first three months of 2015.

The contraction was slightly less than had been first feared after a big uptick in March, but was still the second quarter in a row it has declined.

Sterling was unchanged against the US dollar at just under 1.58 while it was a little lower against the euro at 1.38.

Meanwhile, Brent crude headed down by about a dollar to nearly as low as 65 US dollars a barrel before recovering a little to climb back above the 66 US dollar mark by the end of the session in London.

It left Royal Dutch Shell 29p down at 2026p while BP fell 4.4p to 452.4p.

Other commodity stocks were also lower, with Glencore leading the fallers as it slipped 2 per cent, or 5.4p, to 293.3p, and

Anglo American which dropped 20p to 10901/ 2p.

ITV was one of the session’s big gainers as shares put back losses seen after a positive trading update in the previous session had the shine taken off i t by strike action that hit the broadcaster. Positive broker comments helped the recovery as shares lifted by nearly 2 per cent, a rise of 4.7p to 262p.

Shares in SABMiller were 231/ 2p higher at 36 231/ 2p after it announced a deal to buy Greenwich-based craft brewer Meantime Brewing Company. The firm said the acquisition gave it an entry into the fastest-growing segment of the UK beer market.

Also i n focus was BT after Ofcom proposals requiring the telecoms giant to open up its high-speed network to direct access by rivals i n order to promote competition i n the £2bn “leased line” data market for businesses. The firm said it was already operating on a level playing field and that the move could undermine investment. Shares fell 2p to 463p.

Elsewhere, Bovis said that the number of homes it had completed by May 8 stood at 3,049 - 8 per cent up on a year ago - as it traded well in a positive UK housing market. The Kent-based firm reiterated the group’s pledge to step up the 2015 full year dividend to 40p a share. Shares slid 1p to 1046p.

The biggest risers on the FTSE 100 Index were Carnival, up 70p to 3147p, ITV up 4.7p to 262p,

Compass up 20p to 1147p and Shire up 90p to 5385p. The biggest fallers on the FTSE 100 Index were Glencore down 5.4p to 293.3p, Anglo American down 20p to 10901/ 2p, Coca-Cola HBC down 25p to 1391p and

Babcock International down 17p to 1081p.