Footsie sheds value as slow rate of US industrial production raises concern

FTSE: 5,861.00 (-62.69) Mid-250:11,835.99 (-107.56) Small Cap: 3,242.41 (-29.96): THE FTSE 100 slid in afternoon trade below 5,900 after data in the US showed the rate of industrial production stalled, raising deeper concerns about the pace of economic recovery.

The index fell 1.1 per cent, or 63 points, to 5,861, about the nadir reached in mid-March. Since then, the FTSE 100's lowest closing reading has been 5,858.32, reached on April 18th. Although it has approached that level in intraday trade, it has consistently found support to close above it.

Pressure on financial stocks intensified as traders kept watch on the second day of the meeting of European finance ministers in Brussels.

Investors remained hopeful for signs of an accord to deal with any further assistance needed in Athens to deal with Greece's troubled fiscal position.

"A 're-profiling' of Greek bond maturities was one of the options discussed in a package that is likely to focus on further deficit-cutting measures as well as an expansion and speeding up of Greece's privatisation programme," said Gary Jenkins head of fixed income research at Evolution Securities. Ahead of any announcement, however, financial stocks moved lower.

Barclays fell 1.3 per cent to 271.85p. Lloyds Banking Group was 1.6 per cent lower at 53.73p.

Vodafone was among the strongest stocks of the session - up 0.9 per cent at 169.73p - after a strong reception for the mobile telephone company's annual results, along with a positive outlook for the rest of the year. Revenues came in just ahead of expectations, rising 3.2 per cent to £45.9 billion, stronger than the £45.5 billion quoted in consensus forecasts.

Lower down the market, shares in Enterprise Inns fell 3.6 per cent to 85.27p and to the bottom of the FTSE 250 after it reported interim earnings of $174 million, down from £204m in the same period a year ago.

Drugmakers were weak as well, led by GlaxoSmithKline which shed 2.5 per cent after cautious comments from Morgan Stanley.

"It would look to take profits in its less favoured stocks, such as GSK," said one London-based trader.

The mid-cap index was down 0.7 per cent at 11,852.09 as strength among support services stocks was countered by losses among second-tier financials. - ( Copyright the Financial Times Limited 2011/Reuters)