Moody’s UK warning hits FTSE 100
The FTSE dipped this morning after debt rating agency Moody’s warned it could downgrade top-rated sovereigns including Britain.
Moody’s grim assessment sapped some of the confidence of investors who had been encouraged by Greece finally agreeing a package of austerity measures to steer it away from a default.
The move put the UK’s rating in jeopardy for the first time as Moody’s said it was worried about Europe’s ability to undertake the kind of reforms needed to address the crisis and the amount of funds available to fight it.
Also casting a shadow was a catalogue of violence in Athens with the controversial austerity measures sparking outrage among some citizens.
Meanwhile official figures out this morning showed that UK inflation fell to 3.6 per cent in January, its lowest level since November 2010.
The Office for National Statistics said that consumer price inflation fell from 4.2 per cent in December.
In London miners were the weakest performers with Rio Tinto, down 2.1 per cent, the biggest faller. BHP Billiton was also off by more than one per cent after investors gave a negative response to the pair announcing a $4.5bn joint expansion of copper production.
Also in the sector Anglo American was down more than one per cent.
Other significant fallers were Marks & Spencer, down 1.5 per cent, and British Land which was off by 1.1 per cent.
On the up side, outsourcer Bunzl was the highest climber, lifting by 1.9 per cent. In the financial sector hedge fund giant Man Group was the main gainer, up 1.1 per cent.
Poymetal bucked the downward trend of mining stocks with the Russian company reporting a one per cent lift. Building services firm Wolseley was also up by a similar level.
BA owner International Airlines Group also nudged up by just under one per cent.
In Asia the Nikkei closed up 0.5 per cent after the Japanese government boosted its asset buying and lending scheme to add more liquidity as it bowed to political pressure for bolder action to support the economy. The Hang Seng was up 0.1 per cent as Asian markets overall were encouraged by the move.
Across the Atlantic later US January retail sales numbers will be released as well as import and export prices.