October 18, 2011   597 notes

FTSE ends lower, below key level as growth worries weigh

* Financials fall as euro zone debt woes resurfaceBy David BrettLONDON, Oct 18 (Reuters) - Britain’s leading share index ended lower on Tuesday as nervous investors retreated from riskier assets, forcing the FTSE 100 below a significant technical level as global growth concerns returned to haunt the market.The blue-chip index fell 26.35 points, or 0.5 percent, to 5,410.35 — below the 5,450 level it has managed to close above just once since early August — as investors pulled out of the mining and banking sectors.The FTSE bounced off a session low at 5,348.64, tracking movements on Wall Street as market volatility continued in thin trade.Echoing difficulties faced by investment managers, U.S. investment bank Goldman Sachs reported its second quarterly loss as a public company, blaming difficult market conditions and a lack of confidence among investors and corporate clients.That confidence had been further eroded overnight by figures from China showing quarterly growth at its weakest pace in two years, highlighting the impact an uncertain recovery in the United States and lingering debt problems in Europe was having.Investors had seen China, along with other Asian economies, as providing sustainable growth for businesses while developed economies struggled.Asia-focused bank Standard Chartered fell 2.8 percent, among the worst hit financials.Traders said Standard Chartered shares were not helped by uncertainty after Singaporean state investor Temasek launched a bond exchangeable into the London-listed bank’s shares.Sentiment was dealt a further blow when Moody’s cast doubts over France’s AAA credit rating, and Germany’s finance minister played down heightened expectations that European Union governments will resolve the region’s sovereign debt crisis at a summit on Sunday.Meanwhile, inflation in Britain hit a three-year high in September, heaping pressure on corporates already faced with the rising unemployment figures sapping demand.”Actions by western Governments and central banks will engineer persistent inflation despite high levels of unemployment (stagflation) and very weak growth in developed markets,” Ana Armstrong, managing partner of Armstrong Investment Managers said.Armstrong said allocations to high-yielding equities, with stable cash flows, and with pricing power will be the best performers in this type of environment.Morgan Stanley published a note listing companies with long-term sustainable competitive advantages — included Experian , InterContinental Hotels , Imperial Tobacco , Rio Tinto and Rolls-Royce .Rolls Royce and IMI were among the top risers up 1.6 percent and 2.2 percent, respectively.Elsewhere, Whitbread rose 0.5 percent after Britain’s biggest hotel and coffee shop operator reported a higher-than-expected first-half pretax profit and hiked its dividend over 50 percent.Bargain hunters picked up G4S , which bounced 9.8 percent, having slumped more than 20 percent on Monday when announcing a deeply discounted rights issue to pay for its 1.5 billion pound acquisition of Danish frim ISS .Tullow Oil rose 2.5 percent with traders expecting a well update from the oil explorer soon.

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