FTSE inches down as economic gloom sidelines investors

FTSE inches down as economic gloom sidelines investors

London: Britain’s top share index edged lower early on Monday as weak data kept investors wary of buying heavily sold stocks, while they drew little comfort from pledges from leaders of the Group of 20 nations to stimulate growth.

By 2:35pm (IST) the FTSE 100 was down 3.64 points at 4,229.33 after closing down 1.5% on Friday.

Leaders of the world’s largest 20 economies meeting in Washington over the weekend, agreed on a host of steps to rescue the global economy from the financial crisis.

But they left it to individual governments to tailor their response to their circumstances.

Gloom on the UK economy deepened further as data from property website Rightmove data showed increasingly desperate sellers slashed asking prices for homes in England and Wales by 2.9% in November.

Britain will suffer its sharpest economic contraction in almost two decades next year and the number of people out of work could rise to nearly 3 million by 2010, the Confederation of British Industry said. Oil was hovering near its lowest in almost two years weighed down by concerns about global demand with Japan unexpectedly sinking into recession in the third quarter.

Energy stocks gained however, aided by a Goldman Sachs note which upped estimates and target prices for the oil majors.

BP rose 1.7%, Royal Dutch Shell was up 0.2% while Cairn Energy gained 3.8%.

Similarly, miners were in positive territory, defying lower metals prices.

Banks were hit by the gloomy mood on the UK and global economy, with HBOS, HSBC and Lloyds TSB falling between 2.3 and 3.5%.