Markets: FTSE 100 drifts into the red

16:55 - London's leading index closed the day in the red, with automakers and miners both struggling.

The FTSE 100 (UKX) was 20 points down at 3968, as insurance giant Legal & General (LGEN) ended the day where it had spent the majority of it - perched atop the losers' board, as it slid over 8% to 49.95p.

Given the overall falls across the sector, it was also no surprise to see miners Vedanta Resources (VED), Xstrata (XTA) and Antofagasta (ANTO) also in the upper reaches of the losers' board.

Enjoying a much better day, however, was Anglo-Dutch publisher Reed Elsevier (REL) which finished almost 6% up after Goldman Sachs added it to its "conviction buy" list following yesterday's four-month low.

In the US, the Dow Jones Industrial Average was 44 points to the good, helped by Proctor & Gamble's decision to raise its dividend, which boosted shares.

Elsewhere, technology shares led the Nasdaq down after sector giant Intel ruled out a a clear forecast for its revenue figures, leading the index to fall 15 points to 1610.



16:06 - UK and US markets continued to linger in the red on Wednesday, but falls were only marginal on Wall Street.

The FTSE 100 (UKX) was down 42 points to 3946, with insurer Legal & General (LGEN) still topping the fallers as it slid over 8% to 49.95p.

Meanwhile across the Pond, the Dow Jones Industrial Average was down just five points to 7914.

15:57 - Anglo American (AAL) shares were caught up in the overall market malaise despite maintaining today that its borrowing levels were sustainable.

The mining group's claim comes in the wake of moves by rivals Xstrata (XTA) and Rio Tinto (RIO) to shore up their balance sheets, with the former announcing a $5.9 billion rights issue last month.

At its AGM today, the company also remained confident of achieving $1 billion worth of savings by 2011, having announced a worse-than-expected profit of 1% and the likelihood of 19,000 job cuts.

Anglo's shares were over 3% down, with Xstrata and Rio Tinto both plunging over 6%.

15:29 - Featuring highly in the top traded shares on Interactive Investor today is pharmaceutical giant GlaxoSmithKline (GSK).

Glaxo has not made the big strides into treating cancer that it had set out to achieve, but reports suggest that it could be set for a huge boost if a study into prostate medicine Avodart meets expectations.

Forecasts for added value have been between £500 million and $1 billion from analysts should the drug be approved, with research from other studies have suggested that it could also prevent cancer.

The news buoyed shares amid the general gloom, climbing 1.3% to 1,021.75p.

14:51 - The FTSE 100 (UKX) sank further into the red, down 34 points to 3954 with weak performances from the mining and financial sectors.

Xstrata (XTA) and Legal & General (LGEN) led London's top index lower.

14:41 - Fears over the health of the struggling US economy weighed on Wall Street in early trading.

Investors were jittery after electronics giant Intel said the economic uncertainty prevented it from giving a clear revenue forecast while the chief executive of supermarket chain Wal-Mart said he saw no end to the recession.

The Dow Jones extended yesterday's losses, down 14 points to 7909, with the Nasdaq and the S&P also in the red.

14:17 - US inflation recorded its first year-on-year fall for more than 50 years as plunging consumer demand sent food and energy prices sharply lower.

Figures from the US Labour Department revealed that its Consumer Price Index fell by 0.1% last month after a 0.4% rise in February. However, over the first quarter headline and core consumer prices rose by 2.2% at an annualised rate - above the Fed's target.

Paul Ashworth of Capital Economics says: "With the unemployment rate and the output gap both headed for 10% and the financial system still crippled, the risk of a pernicious debt-deflation emerging is still much bigger than the risk that the Fed's Quantitative Easing actions will lead to runaway inflation."

13:34 - Final salary pension fund deficits have hit a record high of £242 billion at the end of March, according to the Pension Protection Fund.

The declining value of bonds pushed the deficit of 7,400 private sector schemes up from £205 billion at the end of February.

The FTSE 100 (UKX) was down 10 points to 3979, with insurer Legal & General (LGEN) and miner Fresnillo (FRES) both falling over 6%.

Sterling rose above $1.50 - its highest level since mid-January - and continued to strengthen against the euro, hitting EUR1.13.

Thirty-four blue-chips have increased their payouts with 19 of them announcing a double-digit rise.

Read: Dividends on the up in FTSE 100.

London's top stock market was down 16 points to 3972, with Fresnillo (FRES) and mining rival Xstrata (XTA) among the day's biggest losers so far, down almost 8% and 6% respectively.

Also on board is believed to be John Jay, the former Sunday Times journalist who was Duffield's business development director at failed fund manager New Star.

For the full story, read: New start for New Star chief.

US light crude dipped to $49.35 in early trading, but has since recovered slightly to $50.08.

According to Marius Paun and Glen Ward at ODL Securities, "an important level for today's action will be yesterday's low of $51.96. It is important for this level to hold if we are to have a recovery.

"Today's weekly inventories data is expected to show further increases in crude stockpiles which are already at record highs and could have a brief impact before oil reverts to the financial market for direction."

Oil producers were higher after exploration group BG Group (BG-) announced it had made a third oil discovery in offshore Brazil with drilling expected to begin shortly. Cairn Energy (CNE) topped the risers' board, up more than 3.5% to 77p.

Joshua Raymond, market strategist at City Index said: "European markets fell in early trading this morning after UBS reported a Q1 loss and Intel shook the tech sector.

"These tremors, combined with the falls in the US overnight and in Asia this morning, have resulted in investors looking to sell financials and tech stocks this morning.

"Sector wise pharmaceutical, defence and tobacco are higher this morning, and the miners and financials are weaker. This paints a strong picture of how investors are looking to the defensives today, and appetite for risk appears to be taking a bit of a breather."

It found that enquiries are up for the fifth consecutive month and are growing at their fastest pace since September 2003, fuelling optimism that sales will rise in the coming months.

Ian Perry, a spokesman for the RICS, said: "Buyer interest is starting to gain momentum but will remain frustrated while mortgage finance is scarce."

Europe's biggest travel group will own 49% of the venture, which will acquire majority stakes - worth up to $40 million - in assets owned by two tour operators in Russia and Ukraine.

Its shares were trading flat at 257p.

It will also cut another 11% of its staff in a bid to save SFr4 billion. New chief executive Oswald Gruebel is due to tell the bank's AGM: "Our outlook remains cautious and we face many uncertainties. We have to prepare ourselves for this even though we are entitled to be very optimistic about the longer-term prospects for our bank."

The FTSE 100 (UKX) was down three points to 3985 with Legal & General (LGEN) losing the most ground.

US markets were in the doldrums after worse-than-expected retail sales reignited fears over the health of the economy and knocked retailers, big manufacturers and technology companies. News that Goldman is considering a $5 billion share offering also hit financial stocks.

The Dow Jones closed down 137 points to 7920 with the Nasdaq and S&P 500 also in the red.

In Asia, the Nikkei closed down for the third consecutive day, down 100 points to 8742, as exporters lost ground and investors took profits. Hong Kong shares enjoyed a late rally to finish the session up 89 points at 15669.

Falling demand and bad weather hit first quarter aluminium and iron ore output at Rio Tinto (RIO). The world's third largest miner saw aluminium output drop 6% with iron ore production down 15% on the same period the previous year. The group faces enraged shareholders in London today who are battling against its plans to clear some of its debt burden through a £14 billion deal with Chinese miner Chinalco. The group's shares fell almost 4% to 2408p.

Elsewhere in the mining world, FTSE 100 giant Fresnillo (FRES) saw a 9% rise in silver production in the first three months of 2009, up 9% to 9.2 million ounces. Gold production also stabilised at 65,000 ounces. 'Costs have been reduced when expressed in US dollars compared with Q4 2008 as a result of the exchange rate, lower input costs, the ongoing investments in cost control and efficiency improvements,' said Jaime Lomelin, chief executive officer of Fresnillo said. Its shares were down almost 2% to 440.75p.

Ukrainian iron ore producer Ferrexpo (FXPO) has said it remains in the black after hitting full production targets in March following a poor start to the year. "We have been able to keep our costs low while successfully ramping production back up to full capacity in March and placing substantially all of our production in the market during the first quarter. We continue to trade profitably," said chief executive Kostyantin Zhevago. Its shares were up down almost 3% to 75p.

FTSE-250 listed SSL International (SSL) was trading flat at 450p after announcing that increased sales and improved cost control along with favourable currency rates are likely to lift operating profit growth by 30%. It expects total reported sales for the year to come in around 20% higher than last year at £640 million with its Durex and Scholl Footcare brands continuing to perform well.

Engineering consultancy group WS Atkins (ATK) saw its shares drop more than 3% to 490p after forecasting pre-tax profit for the year will be in line with expectations following £10 million of costs involved in 1,200 redundancies last quarter. In February the group said 5% of its workforce would be axed in the second half of the year.