FTSE Closes Lower On Econ Gloom, Grim Results

By 1146 GMT the FTSE 100 index was down 46.30 points at 4,187.96 reversing after a 0.5 percent gain on Wednesday.

Britain's top share index closed 0.8 percent lower on Thursday, weighed by mostly grim blue chip corporate news and a gloomy economic backdrop which hit metal prices and mining stocks.

The FTSE 100 index ended down 32.02 points at 4,202.24, retreating after a 0.5 percent gain on Wednesday.

Mining stocks took the most points off the index with metal prices under pressure on fears for the outlook for the global economy.

"A lot of it stems back to demand issues and that's hurting the miners, and with their heavy weighting, the index tends to move in the same direction as the resources stocks," said Richard Curr, head of trading at Blue Index.

Antofagasta, Anglo American and BHP Billiton fell between 2.8 and 3.9 percent.

Rio Tinto shares vacillated wildly, falling as much as 18 percent at one point, after accompanying quarterly earnings news with confirmation that Chinese state-owned aluminium group Chinalco will invest $19.5 billion in it.

They rallied by the end of the day, closing down 1.5 percent.

The global miner said it will sell $12.3 billion in asset stakes to Chinalco and raise a further $7.2 billion by issuing China's state-owned aluminium maker convertible notes to cut debt.

Energy stocks ended little changed, recovering from losses earlier in the session, as they shrugged off a fall in crude to around $35 per barrel. BP was down 0.2 percent and Royal Dutch Shell was off 0.1 percent.

PFOFIT CRASH

Telecoms firm BT Group was the biggest blue chip faller, down 7.8 percent after its pretax profit crashed 81 percent in the third quarter due to problems at its global network services unit, while its pension swung to a big deficit.

Drinks group Diageo dropped 3.3 percent after it reported half-year earnings at the top of forecasts, with a 26 percent rise, but cut its profit growth target due to the global economic slowdown.

Property companies were hit after British Land announced plans to raise 740 million pounds of equity through a rights issue it hopes remove the risk of a financial covenant break.

British Land fell 5.6 percent while Hammerson slid 4.3 percent and Land securities slipped 4.4 percent.

Inter-dealer broker ICAP was the top FTSE 100 riser, up 7.3 percent after a reassuring trading update. ICAP said its underlying full-year profit should be within market forecasts after its third-quarter revenue rose 20 percent.

Medical device maker Smith & Nephew added 7.3 percent, after it reported full-year sales and earnings broadly in line with forecasts, allaying fears of cash-strapped patients delaying orthopaedic procedures.

Away from corporate news, Wolseley added 5.7 percent after Citigroup raised its rating for the plumbing supplies firm to "buy" from "hold".

Banks were mixed after the grilling of their bosses by the UK Treasury Select Committee ended on Wednesday. Government officials were quizzed on Thursday about the troubled sector.

Regulators should be given the power to penalise banks that pay bonuses to reward short-term deal-making rather than long-term performance, British Prime Minister Gordon Brown told the parliamentary committee on Thursday.

Lloyds Banking Group, Royal Bank of Scotland and HSBC added 1.2 to 4 percent while Standard Chartered and Barclays fell 1.1 percent and 3.2 percent respectively.