London shares started Thursday in negative territory after a Wall Street slump and disappointing Japanese economic data.
The FTSE 100 Index pared early heavy losses to stand 4.5 points adrift at about 6158 after the Dow Jones Industrial Average fell 217 points to 17,711.
On the small-cap front, the FTSE AIM 100 Index was 4.3 points off and the FTSE AIM All-Share was also 0.2 points down.
US shares dropped following downbeat news from retailers, as a profit warning from Macy’s Inc (NYSE:M) had a knock-on effect on peers such as Wal-Mart Stores Inc (NYSE:WMT).
A weak economic survey out of Japan overnight also caused jitters, suggesting its economy deteriorated further at the start of the second quarter.
And traders in London were cautious ahead of a Bank of England interest rate decision, more in anticipation of any comments about the UK economy than expectations of a rate change.
Governor Mark Carney was expected to outline the risks to the economy of a possible UK vote to leave the EU.
Analysts said the central bank may be tempted to ease monetary policy further to offset the immediate negative implications of an exit vote.
FXTM chief market strategist Hussein Sayid said: “Uncertainty generated by the vote is already impacting the economy, with all recent economic data deteriorating.”
Alecto Minerals PLC (LON:ALO) was one of the biggest small-cap risers after agreeing a joint venture with Cora Gold Limited for the Karan gold project in Mali. Shares in Alecto jumped 9.5% to 0.12p.
Shares in Akers Biosciences Inc (LON:AKR) (NASDAQ:AKER) were 8% healthier at 135p as the clinical data technology group increased first quarter product revenue by 79% to US$738,023 against a year ago.
But an announcement by Tri-Star Resources PLC (LON:TSTR) that it expected to complete construction of its Oman antimony roaster next year triggered an 11.6% fall in the miner’s shares to 0.08p.
Back in the Footsie, Supergroup (LON:SGP) rose 12.9% to 1422p after the fashion retailer reported strong like-for-like sales in the 15 weeks to April 23.
But Newcastle United and Sports Direct International PLC (LON:SPD) boss Mike Ashley suffered a double whammy after the football club was relegated to the Championship from the Premier League.
The drop came less than two months after Sports Direct fell out of the FTSE 100 Index. The retailer's shares fell 0.4p to 375.8p.
Market snapshot
The London market started Thursday firmly in the red following a slump in the US last night.
The FTSE 100 Index was 57.72 points adrift at about 6105 after the Dow Jones Industrial Average fell 217 points to 17,711.
Another dire survey out of Japan overnight caused jitters amid suggestions the country's economy deteriorated further at the start of the second quarter.
And traders in London were cautious ahead of a Bank of England interest rate decision, more in anticipation of any comments about the UK economy than expectations of a rate change.
Market preview
London’s FTSE 100 is seen lower at Thursday’s open after international equities fell amid worries over American consumer spending.
Retail stocks were among the weakest on Wall Street on Wednesday as major US benchmarks tumbled, as earnings reports from the likes of Macys and Disney disappointed.
The Dow Jones shed 217 points, 1.2%, to close at 17,711. The S&P 500 dipped 0.96% to 2,064 and the Nasdaq lost 1.02% to 4,760.
Souring stocks in the Big Apple for the most part carried over to Asia.
Hong Kong’s Hang Seng was down 113 points, 0.57%, at 19,943. The Shanghai Composite eased 0.3% lower to 2,827, but Japan’s Nikkei managed to rise 0.3% to 16,631.
Australia’s ASX 200 fell 0.4% to 5,350.
In commodity markets, crude prices were stronger due to concerns over supply outages – mainly in Canada and Nigeria – and a much bigger than expected drop in US crude inventories.
At US$47.50 Brent crude was up 4.1%, while West Texas Intermediary crude was up 3.3% at US$46.21.
Gold was slightly easier at US$1,272 per ounce.
In London, IG Markets sees the FTSE 100 around 26 points lower. At about an hour ahead of the open the CFD and spreadbetting firm was calling the blue chip benchmark at 6,139 to 6,144.