FTSE steady despite growing European economic fears

UK investors were unmoved by a slew of bad news this morning with the FTSE 100 down 0.3% at 5552 points.  

Ireland put a £29 billion price tag on its bailout for Anglo Irish Bank, while Spain was downgraded by Moody’s credit agency. David Buik at BGC partners said that the Spanish downgrade was less severe than expected: ‘Spanish bonds have rallied in early sorties as the market was expecting worse than a one notch downgrade to AA. Irish bonds opened unchanged.’

This morning also saw market research firm GfK NoP publish research showing that recent consumer confidence had been a ‘false dawn’. Its consumer morale barometer fell by two points to -20 showing a drop in consumers’ confidence in their personal financial situations over the past year and in their expectations for the next 12 months.

Consumers were also pessimistic about the economic situation with the optimism measure lower than in September 2009.

However house prices saw a slight rise according to Nationwide. Although the building society pointed to uncertainty ahead.

The mostly poor economic outlook was met with a 0.3% fall in the FTSE 100. The biggest fallers on the index was financial company ICAP, down 3% at £4.25. The interdealer broker’s shares fell after posting a trading statement which said that increased interest costs will hit earnings growth. The company was also downgraded by analysts at Numis to ‘add’ from ‘buy’.

Shares in catering company Compass Group were down 2.4% at £5.38 despite a statement saying it expected earnings per share to rise by 15%. There were reports that the fall was profit taking and that expectations may have run ahead of the company's progress. Banks were also down this morning with Barclays and Standard Chartered both in the top ten fallers.

The biggest gainer was BP. Its shares were up 1.6% at £4.27. The Wall Street Journal reported that the company’s incoming chief executive is already shaking up its senior management.

The pound was up 0.5% against the US dollar at $1.58 and up 0.6% against the Euro at €1.17. The price of gold was $1,312 per ounce.