FTSE 100 falls slightly despite GDP figures

Tuesday 29th September 2009

The FTSE 100 fell slightly on Tuesday, despite data showing the economic downturn could be turning.

The Office for National Statistics (ONS) released data showing the UK GDP contracted 0.6 per cent in the second quarter – down from the previous estimate of 0.7 per cent.

The year-on-year decline remained at 5.5 per cent.

However, traders were expecting the data and the FTSE 100 was unbothered – focusing more on figures from the US.

The index was down 0.12 per cent at the close of trading to 5,159.72 – a drop of 5.98 points.

At 11:43 EDT (16:43 BST), the Dow Jones in New York was down 0.33 per cent – despite an early jump over the starting price as house prices with up in the US.

Meanwhile Chicago's S&P 500 dropped 0.28 per cent as poor consumer confidence data filtered in.

Leading the gains in London was Legal & General up 4.75 per cent – as speculation grew of a bid from Resolution.

Standard Life was up 3.04 per cent and Compass Group rose 3.56 per cent.

Aviva rose 2.96 per cent.

Lonmin fell 3.23 per cent as the price of platinum saw falls.

REITs Segro and Land Securities fell 2.42 per cent and 2.82 per cent respectively, while Vodafone fell 2.04 per cent.

David Jones, chief market strategist at IG Index, said: "It's been a quiet day for shares in London – the FTSE 100 has flipped from positive to negative throughout the day in a very tight range of less than one per cent.

"After starting off initially weak, markets were given a gentle nudge back up when the revised second quarter GDP figures showed the economy had contracted slightly less than first thought."

He added: "After all the excitement throughout the summer that saw solid gains almost every week for shares, investors may be feeling a bit bored with the lack of direction at the moment.

"However, any weakness still seems well supported and while the next few weeks and months may not offer the fireworks we’ve had in the market recently, it seems that shares are still well placed to grind at least a little higher from their current levels."

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