FTSE CLOSE: Weak eurozone factory figures dampen mood; BSkyB and Home Retail results

UPDATED:

16:35 GMT, 2 May 2012

17.20 (close): Worrying economic data from both sides of the Atlantic saw banks drag London's leading shares index into the red today.

The FTSE 100 Index was down nearly 1 per cent, or 54.1 points to 5758.1, after a US employment report showed a disappointing number of jobs created in April, triggering nerves ahead of Friday's closely-watched non-farm payrolls report.

The Dow Jones Industrial Average, which hit a new four-year high last night, was down 0.3 per cent as the London market closed.

Market watch: Strong U.S. manufacturing figures gave a boost to global growth hopes

Meanwhile, a report showed the
largest increase in German unemployment for three years, while a
manufacturing survey showed activity in the country fell to its lowest
level since mid-2009.

The data, which was accompanied by
record eurozone unemployment figures, prompted fears that contagion has
now spread to Europe's strongest economy.

The pound was up against the euro at
1.23 after the single currency was hit by the worries over Germany. But
sterling was down against the dollar at 1.62 after the greenback was
seen as a safe haven despite the worrying US data.

Banks were among the biggest losers
after Swiss group UBS and Asia-focused Standard Chartered missed
forecasts on first quarter profits.

Barclays was nearly 6 per cent lower, off
12.6p to 213.7p, while Lloyds retreated 1.5p to 32.1p following a decent
session yesterday in the wake of signs of progress in tackling its
mammoth turnaround. Standard Chartered was 4 per cent, or 59p lower at 1453p.

However, Next topped the risers board
after it said it remained on track for annual profits of between 560million and 610million.

It continues to be propped up by a
strong performance at its online business as the tough consumer climate
weighs on its stores. Outlet sales fell 3.9 per cent in the 13 weeks to April 28
but this was offset by an 11.8 per cent increase at its online Next Directory.

Shares were 3 per cent or 75p higher at 2971p, meaning its stock has risen a third in the last year.

BSkyB was among the biggest risers,
with a gain of 10.5p to 701.5p, after a net rise in customer numbers of
78,000 to 10.5 million in its third quarter, which was slightly better
than expected.

The satellite broadcaster also insisted it was 'a fit and proper licence holder' as it continues to come under the glare of media regulator Ofcom.

Outside the top flight, Argos and
Homebase owner Home Retail Group slumped 13 per cent or 13.5p to 87.6p after it
axed its dividend in the wake of a 60 per cent slide in annual profits to 90.2million.

Home Retail has now seen its shares more than halve in value in the last year.

Shares in JD Wetherspoon were 0.1p
higher at 408.5p after it reported an improved trend in like-for-like
sales but said continued tax and trading pressures meant it was slightly
more cautious about this year.

The biggest Footsie risers were Next
up 75p at 2971p, Legal & General ahead 2.7p at 121.8p, Burberry up
32p at 1515p, and Intercontinental Hotels ahead 32p at 1516p.

The biggest Footsie fallers were
Barclays down 12.6p at 213.7p, Lloyds off 1.5p at 32.1p, Standard
Chartered down 59p at 1453p, and Kazakhmys off 27.5p at 850p.

15.30: London stocks have slumped deeper into the red after poor German economic data and disappointing jobs figures out of the U.S.

The
FTSE 100 is trading down 60.3 points at 5,751.94 late in the session,
while in New York the Dow Jones is 77.8 points lower at 13,201.6.

14.00:

European markets are trading in muted fashion after a worrying deterioration in the German economy.

Figures for April showed the largest increase in German unemployment for three years, while a manufacturing survey showed activity fell to its lowest level since mid-2009.

The FTSE 100 is down 39.1 points at 5,773.2, while German's DAX is up 2.6 points at 6,763.8 and France's CAC 40 is ahead 8.2 points at 3,221.

U.S. stock futures remained lower after ADP data showing 119,000 jobs were created in April failed to impress investors.

Investors are already gearing up in anticipation of the more influential U.S. non-farm payrolls jobs report this Friday.

In corporate news, BSkyB has declared that it 'remains a fit and proper licence holder' despite the scandal engulfing top shareholder News Corp.

Ofcom is considering whether BSkyB, which is 39 per cent owned by Rupert Murdoch's media giant, should hold a broadcast licence in the wake of the phone-hacking crisis and other allegations of wrongdoing.

But shares in BSkyB were 2 per cent or 14.25p higher at 705.25p as its third quarter trading update went down well with investors.

Louise Cooper of BGC Partners said being forced to sell his BSkyB stock would be 'a bitter blow for Rupert Murdoch'.

'Less than a year ago he wanted to buy the whole of BSkyB outright, now he may be forced to sell the 39 per cent he owns,' she said.

But Ms Cooper added that the stock market reaction since yesterday's damning report on the Murdochs by MPs suggested that there may be plenty of interest in BSkyB should News Corp have to sell.

Read the full story on BSkyB here.

Home Retail has tumbled 12 per cent or 11.95p to 89.05p after it slashed the annual dividend as profits plunged at its Argos chain.

The threat of closure is hanging over hundreds of Argos stores as its new American boss carries out a full-scale review of operations. Read more here.

12.00:

Futures trading is pointing to a lower open on the Dow Jones as U.S. investors await a monthly jobs report.

Worse than expected eurozone manufacturing figures released this morning are also dampening investor sentiment.

The FTSE 100 has slid 27.7 points to 5,784.6.

10.25:

The FTSE 100 has dipped 17.7 points to 5,794.5 as losses in the banking sector offset strong corporate updates from the likes of broadcaster BSkyB and fashion chain Next.

Banks took a hit after Swiss group UBS missed forecasts on first quarter profits. Barclays was more than 2 per cent lower, off 5.8p to 220.5p, while Lloyds Banking Group retreated 0.5p to 33.1p.

BSkyB gained 22.25p to 713.25p after it beat City hopes with a net rise in customer numbers of 78,000 to 10.5million in its third quarter.

Next said it remained on track for annual profits of between 560million and 610million after brand sales improved 1.4 per cent in the 13 weeks to April 28. Its shares were 72p higher at 2968p.

Outside the top flight, Argos and Homebase owner Home Retail Group slumped 5p to 96p after it slashed its annual dividend in the wake of a 60 per cent slide in profits.

Growth in the UK construction industry slowed in April, according to the latest Markit/CIPS index – it fell to 55.8 from 56.7 in March. Figures below 50 indicate contraction and those above expansion.

8.30: The FTSE 100 has opened up 2.8 points at 5,815.1, consolidating after upbeat U.S. manufacturing figures sparked a rally yesterday.

The blue chip index closed up 74.45 points at 5,812.23 in the last
session – ending above the 5,800 level for the first time since April 3.

Banks and commodity stocks were lifted by the better-than-expected U.S.
ISM manufacturing data, which grew at the strongest rate in 10 months
and encouraged global economic growth hopes.

'We saw strength in new orders, production, supplier deliveries and employment, which has got traders feeling just a little more confident about Friday's [U.S.] payrolls report,' said Chris Weston, institutional trader at IG Markets.

In the UK, the April Markit/CIPS construction index will be released later, with a reading of 54.0 forecast, down from 56.7 in March. Figures below 50 indicate contraction and those above expansion.

Bank of England March consumer credit and mortgage lending data are also scheduled.

Ex-dividend factors will knock 3.43 points off the FTSE 100 today, with Admiral Group, ARM Holdings, Barclays, Croda International, ITV, Kingfisher, Weir Group and Xstrata all trading without their dividend entitlements.

Stocks to watch today include:

Standard Chartered: The Asia-focused lender said its first-quarter income grew by less than its previous 10 per cent target, as the strength of the dollar against Asian currencies impacted income growth.

Royal Bank of Scotland and Lloyds Banking Group: Tungsten, the British acquisition vehicle founded by financier Edmund Truell, would consider offers for the banks' insurance units, but has not approached either yet, Truell told Reuters.

Xstrata: The miner has sought to win over waverers to the merits of its $39billion takeover by commodities trader Glencore, telling shareholders to back the 'fair and reasonable' offer even as investors flexed their muscles by expressing opposition to its pay plan.

Royal Dutch Shell: Woodside Petroleum, Australia's largest oil and gas company, said a wide range of investors was interested in buying a $7billion stake in the company that Royal Dutch Shell is looking to sell.

BSkyB: Third-quarter results.

Home Retail: Full-year results.

Next, Henderson Group, JD Wetherspoon, Spirent, Carillion, Provident Financial, Novae Group: Trading updates.

Wolfson Microelectronics : First-quarter results.

Numis, Avon Rubber: First-half results.

Communisis, Deltex Medical, Fiberweb, Lighthouse, Nichols, Quadnetics, Stanley Gibbons, Statpro, Tikit: Annual general meetings.

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FTSE CLOSE: Weak eurozone factory figures dampen mood; BSkyB and Home Retail results