Disappointing economic data keeps markets in the red

The FTSE has spent the day in the red and closed down 0.38 per cent at 6,037.08 after disappointing US economic data and news. 

Miners were also led down by news from China, where an above-target 4.9 per cent increase in inflation raised the prospect of further interest rate rises.

Banks were buoyant, though, led by Barclays, which ended 5.79 per cent higher at 328.75p after investors welcomed its full-year results.

It reported a forecast-beating 32 per cent rise in annual earnings, but warned that tougher regulations will result in lower returns.

“Barclays is the standout performer in the FTSE 100, with clear daylight between the bank and the other major gainers,” said Will Hedden, sales trader at IG Index.

Fellow banks RBS took second place on the riser’s board, up 2.15 per cent to 45.25p, while Lloyds rose 1.8 per cent to 66.88p.

Supermarket chain Wm Morrison closed up 1.44 per cent at 280p after it said it had bolstered its web sales presence by acquiring online children’s retailer Kiddicare.

Weak US retail sales data and higher import prices added to the mixed picture from China to cause investors to sell off mining stocks.

“The inflation data out of China… has seen traders sell out of mining positions as the day has progressed,” said Joshua Raymond, market strategist at City Index.

“Align this sentiment with economic data today such as the US retail sales, which missed market expectations, and this has convinced some to downside their appetite for risky asset classes such as mining stocks.”

Anglo American topped the fallers with a 4.79 per cent slump to 619.84p, followed by Rio Tinto (down 2.82 per cent to 4,550p); Fresnillo (down 2.82 per cent to 1,447p) and Kazakhmys (down 2.6 per cent to 1,538p) in the top ten. Antofagasta, Xstrata, and BHP Billiton also fell throughout the day.

Anglo was also hit by a downgrade from Citigroup to "hold" from "buy" on valuation grounds.

In the FTSE 250, food manufacturer Premier Foods (up 16.52 per cent to 25.75p) and Imagination Technologies (up 15.35 per cent to 391.5p) both posted double-digit gains after good deal news.

Heavily-indebted Premier posted an 0.6 per cent rise in full-year trading profit and said its ready-meal division was not up for sale, as it was in a better financial position.

Imagination, which designs electronics technologies, was in demand after signing a licensing agreement with STMicroelectronics, a European electronic device manufacturer.

Brewin Dolphin closed up 2.73 per cent at 169.5p after selling its corporate finance and broking business to a joint venture between Brewin management and a Spanish group called N+1.

Brewin will bank £1m and take a 14 per cent stake valued at £4m in the new unit.

Software firm Micro Focus slumped by 26.33 to 291p after announcing third-quarter revenues far below expectations. It will start a major cost cutting programme, but that will cost it $14-18m (£8.73-11.23m) to implement, it said.

And Domino's Pizza lost 3.92 per cent to close at 502.5p despite posting a 27 per cent increase in profit before tax to £38m, after its sales growth slowed.

US markets also remained in the red, with the Dow Jones industrial average finishing down 41.55 points, or 0.34 per cent, at 12,226.64.

The S&P 500 fell 4.3 points, or 0.32 per cent, to 1,328.02 while the Nasdaq Composite Index lost 12.83 points, or 0.46 per cent, to 2,804.35.