European stocks continue to slide

European markets continued to slide yesterday as fears over the global economic recovery triggered further falls in commodity prices.

In London, the FTSE 100 Index dropped 56.2 points to 5919.6 as mining shares followed the falling price of oil and metals and dragged the market downwards.

In Frankfurt the DAX fell 0.68 percent to 7,495.05 points while in Paris the CAC 40 slid 0.86 percent to 4,023.29 points

Fresnillo was hit by soft silver prices and topped the fallers’ board, down eight per cent or 114p to 1297p, while Antofagasta dropped 58.5p at 1130.5p and Vedanta Resources fell 93p to 2071p.

Wall Street’s Dow Jones Industrial Average dropped 0.6 per cent after worries over declining crude oil prices were compounded by a job cut warning from communications group Cisco.

A raft of US economic data failed to lift sentiment as retail sales posted a below-consensus rise of 0.5 per cent and producer price inflation came in higher than expected at 0.8 per cent.

Brent crude oil dropped more than one per cent to $111 a barrel, which saw Petrofac lose 31p at 1453p, BG Group shed 26.5p to 1340.5p and Essar Energy retreat 8p to 422.1p.

In corporate results, BT shares were down 4.3p to 197.6p despite it reporting a 20 per cent rise in adjusted annual profits to £2.1 billion in its full-year results.

Investors were bearish even though the company said it expects to grow underlying profits for the next two years and will return to underlying sales growth in 2013.

British Gas owner-Centrica and Scottish & Southern Energy defied the slump in commodity prices to feature near the top of a shortened risers board following takeover speculation.

Centrica, up 4.8p at 316.5p, was again boosted by talk that the Qatari Investment Authority may be eyeing a takeover deal, while SSE benefited from a report that Spanish utility giant Iberdrola is mulling an offer.

SSE fed off the improved sentiment in the industry and advanced 12p to 1363p. Outside London’s top flight, shares in fashion chain SuperGroup lost some of their recent sparkle after sales growth was impacted by its failure to get enough stock into stores to meet demand during the recent heatwave.

Shares topped the FTSE 250 fallers board, down nearly 23 per cent, or 370p to 1204p.

Currys and PC World owner Dixons Retail spared investors another profits warning but warned it expected more tough times ahead.

Dixons, which has 1,200 stores in around 28 countries, continues to expect profits of around £85 million for the year to April 30, having issued its second profits alert in as many months at the end of last March. Shares were flat at 15.9p.

Embattled retailer Clinton Cards posted another slump in sales but the company’s plans for a website and store overhaul swayed investors as the shares reversed earlier losses and added 0.8p to 17.3p.