FTSE afternoon report: Difficult day as US figures loom
A difficult week for world markets showed little sign of improvement today as investors braced themselves for more gloomy figures on the American economy.
Uncertainty caused by the imminent release of the revised figure for second quarter US GDP kept traders on the sidelines, with the FTSE 100 Index near to its opening mark following a rise of 6.8 points to 5163.3.
This was despite the UK economy recording its best quarterly performance in a decade during the second quarter, when output grew by a revised 1.2%.
Economists warned the improvement was unlikely to be repeated in the current quarter to the end of September and said the UK government's spending squeeze and VAT hike to 20% would have a major impact on growth next year.
The progress will also depend on the United States, where fears have risen in recent weeks that the world's biggest economy could be facing a double-dip recession.
US Federal Reserve chairman Ben Bernanke will offer his insight into the scale of the economic slowdown when he addresses a gathering of global policymakers at Jackson Hole, Wyoming later in the day.
The flight from riskier assets in London continued with losses for a number of major mining stocks, including BHP Billiton (LON:BLT) after a drop of 19p to 1783.5p.
Tullow Oil (LON:TLW) fell 50p to 1209p - making it the biggest faller in the FTSE 100 Index - after the government in Uganda repossessed the joint venture Kingfisher field in a move seen as a further setback to the country's oil industry.
BP (LON:BP) shares remained under pressure with a drop of 6.7p to 378.9p, while in the banking sector Royal Bank of Scotland(LON:RBS) fell 0.3p to 43.6p and Lloyds Banking Group (LON:LLOY) dropped 0.1p to 67.7p.
In corporate results, property website Rightmove (LON:RMV) rose nearly 2%, or 9.5p to 631.5p, after it reported a 39% rise in half-year profits and raised its dividend.
Analysts described the figures as strong and said there was some encouragement from upbeat comments by Rightmove's management.
Aga Rangemaster (LON:AGA) shares were 3.75p higher at 89.25p after the cooker firm returned to profit at the half-year stage and restored its dividend, although analysts warned the pension deficit represented a major challenge.
Meanwhile, shares in serviced office provider Regus (LON:RGU) dropped more than 1% as analysts said the company's pre-tax profits were slightly below expectations. Shares were 0.75p lower at 65.5p.