London’s leading shares index ended the week moving further away from the elusive 6,000 mark as it fell into the red on concerns over the US fiscal cliff.
The FTSE 100 Index closed 7.9 points lower at 5921.8 after Speaker John Boehner said on Thursday night, after meeting Barack Obama, that the president’s budget proposals were not balanced.
His comments cast further doubt over the chances of Democrats and Republicans reaching a Budget deal to avoid the fiscal cliff of steep tax hikes and budget cuts on January 1.
Analysts said the FTSE 100 is unlikely to progress and move towards the 6,000 mark with the ongoing debate hanging over traders’ heads.
The uncertainty overshadowed encouraging manufacturing data in China, which revealed the best performance since October 2011, raising hopes that growth in the world’s second biggest economy will start to accelerate.
A bigger-than-expected fall in US consumer prices in November, driven by lower petrol prices, also failed to cheer investors.
The pound was down against the euro at 1.22 after a round of poor construction sector data and last night’s UK credit downgrade from Standard and Poor’s hit sterling. The pound was higher against the US dollar, however, at 1.61.
The biggest FTSE 100 risers were Polymetal International up 26p at 1175p, Kazakhmys ahead at 14p at 758p, Experian up 16p at 1015p and Rio Tinto ahead 51.5p at 3390p.
The biggest FTSE 100 fallers were Prudential down 17.5p at 881p, Anglo American off 30.5p at 1826.5p, Weir Group down 29p at 1807p and Admiral Group off 18p at 1135p.