Markets: FTSE 100 drops back

16:55 - London markets ended the day in negative territory amid pessimism over the health of the US economy.

The FTSE 100 (UKX) closed down 31.54 at 5323.96 with Royal Bank of Scotland (RBS) the biggest faller following news of its secret emergency funding at the height of the financial crisis.

Joshua Raymond of City Index says: 'With two really key bits of economic data out today in the form of US GDP and Consumer Confidence, investors were always likely to be a bit jumpy and this is exactly what we have seen. 

As soon as US GDP figures came out weaker than consensus, investors quickly moved to cash in their profits fearing that US Consumer Confidence would also disappoint. 

'However, with Consumer Confidence rising more than previously anticipated, we saw some investors look to buy back into the market, which helped to limit today's losses.'

16:34 - Wall Street was still struggling to shake off the lower-than-expected third quarter US growth rates as trading wore on.
 
Dow Jones was down 60 points to 10,390, while the Nasdaq dropped 14 points to 2161. The S&P 500 was faring marginally better but still suffered losses of five points, taking its value down to 1100. 
 
JP Morgan Chase and Alcoa were leading the losses.

16:22 - Oil prices were on a slippery slope as investors grew jittery over the pace of global demand. 

A much slower-than-anticipated economic recovery in the US, coupled with fears that Chinese banks will be forced to curb their lending, caused tension in the market. 

Crude oil slipped to $76.21 a barrel, while London Brent was trading down at $76.54 a barrel.

16:00 - Frenzied buying interest propelled the price of gold to fresh highs on Tuesday as confidence in the US dollar waned. 

Gold touched a record $1,167 an ounce as central banks and investors increasingly turn to the precious metal as a safe haven. 

The sharp rally led analysts to predict $1,200 an ounce as the next stop. 

15:41 - Aurelian Oil and Gas (AUL) is steaming ahead with its Siekierki gas project in Poland after signing a deal with Polish drilling company Nafta Pila to drill two wells on the site.

Drilling on the first well, Trzek-2, is expected to get underway in May 2010, with the second well to be drilled in the latter part of the year. 

Rowen Bainbridge, chief executive of Aurelian, commented: "I am delighted to have Nafta Pi?a and the IDM 2000 available for our Siekierki tight gas project.  We now have a first class rig and a first class drilling contractor, with extensive expertise in these kinds of wells, to drill two exciting appraisal wells on our flagship project."

The news follows on from the recently signed agreement with Kulczyk Investments for the sale of gas produced from the field.   

Aurelian's share price held steady at 20.25p.

15:13 - London markets dropped back into the red as Wall Street took a tumble.

The FTSE 100 sank 30 points to 5326 with Thomas Cook (TCG) the heaviest faller, down by more than 3% amid concerns it could be looking to tap shareholders for cash.

14:45 - Wall Street got off to a poor start after the US government revised down the economy's growth rate for the third quarter.

The Dow Jones fell 53 points to 10398 with the Nasdaq and the S&P also slipping around 0.5%.

14:22 - The US economy grew by a much lower rate than previously forecast in the third quarter, revised figures have shown.

The GDP of the world's largest economy grew by 2.8% between July and September, down from the 3.5% previously given by the Department of Commerce.

The downward change came from a higher level of imports, which exert a negative effect, and lower than expected construction of non-residential buildings.

For the full story: read US GDP revised down 

13:48 - Mining titan Rio Tinto (RIO) could soon be adding Australia's Iron Valley deposit to its hefty portfolio after the company entered an agreement with owner Iron Ore Holdings to examine its potential.

The agreement comes on hot on the heels of Rio's deal with the mining junior to buy up to 1.5 million tonnes of iron ore from its Phil's Creek deposit annually.

The iron ore will be delivered to Rio Tinto, which will then transport it to the coast for shipment.

Chief executive Sam Walsh said: "This is a significant development for Rio Rinto, IOH and the Pilbara generally. It is a prime example of how a major established producer and a small, progressive junior can work together to achieve an excellent outcome for all stakeholders."

Rio Tinto's shares were up marginally to 3,266p.

The FTSE 100 (UKX) was 12 points to the good, standing at 5367, with Anglo American (AAL) still top of the pile, leading the way from insurer Prudential (PRU) and software manufacturer Invensys (ISYS).

The venture will be split 50:50, with each partner making an initial cash payment of $530,000. Oil and gas services provider Petrofac said the development marked its commitment to establishing a long-term presence in the country.

The new company, expected to begin trading in the New Year, will offer maintenance and repair for process equipment as well as the manufacture of spare parts.

Petrofac's shares were static at 998.50p.

Last month's figure is also almost double that for the same month in 2008.

Net lending, which strips out redemptions and repayments, also held its own at £3.1 billion, slightly higher than the £2.8 billion figure recorded in August.

Howard Archer, chief UK economist at IHS Global Insight, says: "Housing market activity has been lifted from its late-2008 lows by low mortgage interest rates and the significant fall in house prices from their 2007 peak levels to their March/April 2009 troughs. However, the BBA data suggest that the already fairly gradual upward trend may be losing steam."

Mervyn King told the Treasury Select Committee that the two banks were given the cash injections in October and November 2008 to "prevent a loss of confidence spreading through the financial system as a whole".

HBOS first needed a lifeline on 1 October after the collapse of Lehman Brothers in the preceding weeks sent panic waves through the financial sector. Its total borrowing rose to £25.4 billion in the middle of November and was eventually repaid on 16 January.

For more, read: BoE reveals secret funding for RBS and HBOS.

The Financial Services Authority (FSA) says the firm failed to conduct its business with due skill, care and diligence and failed to take reasonable care to organise and control its affairs responsibly.

Margaret Cole, FSA director of enforcement and financial crime, says: "Firms must ensure their systems and controls develop at the same rate their business operations grow; if this doesn't happen - as in Nomura's case - they run the risk of having systems that are inadequate for their business."

After a shaky start, the FTSE 100 (UKX) was up eight points to 5633, with miners leading the recovery - despite a dip in commodity prices.

Leading the way was Anglo American (AAL) - up over 2%, with rival Lonmin (LMI) and high street stalwart Marks & Spencer (MKS) just behind it.

The move allows the FTSE 250 group to close 89 empty or struggling stores in return for reduced rents and concentrate on its profitable core.

Some 97% of landlords voted in favour of the CVA to keep the company afloat yesterday. Blacks had required a minimum 75% to push through the agreement.

For the full story, read: Blacks rescued from brink of collapse.

The estimated figure put business investment at £28,393 million for the third quarter - down from the second quarter's £29,278 million total.

The year-on-year fall was much more drastic, down 21.7% on the third quarter in 2008.

Justifying its selections, Alliance Trust said: "We still believe that the consumer will remain subdued for some time, hence our underweight positions in Consumer Goods and Services as well as Utilities and Healthcare."

Looking forward, it added: "Guidance and clarity for 2010 and beyond is improved, which should provide support for current market valuations, which were starting to look a little stretched in certain areas.

"Our concerns regarding the withdrawal of quantitative easing and the associated risks remain."

Shares in the FTSE 100 firm dipped to 315.2p.

The price of 37p is at a 59.5% discount to Monday's 91.47p closing price, with Lloyds hoping to raise £13.5 billion in attempt to avoid participation in the government's Asset Protection Scheme.

Shareholders - who vote on the proposal at Thursday's AGM - will have the option to buy 1.34 new Lloyds shares for each existing share should the deal be approved.

The FTSE 100 (UKX) was down 32 points to 5322, with TUI Travel (TT-) and Man Group (EMG) nursing the heaviest falls early on.

Fears that more financial firms would be tapping up shareholders and a strong yen weighed on stocks in Japan on Tuesday. The Nikkei slumped to a four-month closing low of 9401 - down 96 points on the day's trading. There was also further bad news for Japan Airlines which sunk to an all-time low amid bankruptcy concerns.

In Hong Kong, the falls were even more drastic - the Hang Seng suffering its largest one-day fall for three weeks as stocks followed their Shanghai counterparts as investors' fears over fund outflows grew. The Hang Seng closed 348 points down at 22423.

Stronger-than-expected home sales data boosted US markets on Monday, with commodity stocks also lifted by a weakened dollar.

The Dow Jones was up 133 points to 10451 at the close, with the Nasdaq up 30 to 2176 and the S&P 500 climbing 15 to 1106.

Pre-tax profit at water supplier Severn Trent (SVT) climbed 51% in the six months to end-September, with the FTSE 100 firm on course to meet its cost savings intentions for the year.

Severn saw pre-tax profit hit £208.2 million, with group turnover climbing 4.6% to £852.1 million.

Sir John Egan, Severn's chairman, was pleased with the performance and announced that the firm would be increasing its interim dividend to 26.71p.

Shares in the firm were up marginally to 999.5p.

Topps Tiles (TPT) is to launch a placing of 17.1 million shares to shore up its battered balance sheet, as the firm today reported a huge drop in full-year profits.

In the year to 26 September, Topps made a pre-tax profit of £4.9 million - down from £27.7 million this time last year, with group revenue down over 10% to £186.1 million. Adjusted pre-tax profit fell 45% to £16.3 million.

The intended share placing is the equivalent of 10% of the tile specialist's current share capital and is seen as "a precautionary step in the event of a further downturn in consumer confidence and spending but will also give us additional resources to support the company's growth strategy as opportunities arise in the market", the company said.

Despite turning to its shareholders, Topps did say it saw some signs of stability returning to its markets.

The firm's shares slumped over 4% to 90.25p.