LONDON (ShareCast) - Concerns over the US 'fiscal cliff' increased overnight after House Speaker John Boehner cancelled a vote on a back-up tax-cut plan after failing to receive enough support by his own party.
As expected, stock markets across Europe were registering moderate losses in early trading on Friday.
Market analyst Michael Hewson from CMC Markets said: "It's one thing when Republicans can't agree with Democrats on tax rises andspending cuts with respect to the on-going saga of the fiscal cliff negotiations, but quite another when Republicans can't even agree amongst themselves as House leader John Boehner's much trumpeted plan B went the way of the fairies as Republicans couldn't even agree amongst themselves about what form plan B would take, and as such the vote on it was pulled.
"This lack of agreement pretty much guarantees that any solution is likely to push beyond the January deadline and increase market uncertainty at a time when volumes will be a lot lighter than usual," Hewson said.
Two surveys of consumer confidence disappointed this morning: the GfK consumer confidence survey in the UK fell from -22 to -29 in December, missing the -25 forecast; while the forward-looking German GfK survey fell from 5.8 to 5.6 for January, missing the 5.9 estimate.
Meanwhile, the Chinese MNI flash business sentiment indicator fell from 53.78 to 52.23 in November (Xetra: A0Z24E - news) .
Around 09:30 in London will see the release of the final reading of UK third-quarter gross domestic product (GDP) figures. Initial estimates showed that the economy expanded by 1.0% in the three months to the end of September; the final reading is expected to remain unchanged.
Stateside, figures are expected to show that personal income rose by 0.3% in November (0% change in October) and personal spending increased by 0.4% (-0.2% previously). Meanwhile, the University of Michigan confidence survey is forecast for a slight rise from 74.5 to 75 in December.
Risk appetite wanes
Mining and financial stocks slipped early on as risk appetite was scaled back on the back of developments in US budget talks. ENRC, Fresnillo (Other OTC: FNLPF - news) , EVRAZ and Barclays (LSE: BARC.L - news) were among the worst performers on the FTSE 100 (FTSE: ^FTSE - news) .
ENRC was being weighed down by a ratings cut by Goldman Sachs (NYSE: GS-PB - news) to 'neutral' this morning.
Even Xstrata (Other OTC: XSRAF - news) was under the weather despite saying that it is set to boost ore production by a further third at its Lady Loretta mine in north-west Queensland, Australia.
BAE Systems (LSE: BA.L - news) fell despite signing a £2.5bn deal with the government of Oman to supply of Typhoon and Hawk Advanced JetTrainer aircraft. This comes two days after the company warned that full-year underlying earnings could be hit by three pence per share if it cannot agree on pricing on a large Saudi Arabian Typhoon aircraft contract.
Serviced office provider MWB Business Exchange gained after FTSE 250 (FTSE: ^FTMC - news) peer Regus (Other OTC: RGSJF - news) launched a fresh offer for the company. Regus is offering £40m for the group, well below the previous offer of £60m in May 2011.
FTSE 100 - Risers
United Utilities Group (UU.) 688.00p +2.08%
Pennon Group (Other OTC: PEGRF - news) (PNN) 649.00p +2.04%
Severn Trent (NasdaqCM: STRN - news) (SVT) 1,589.00p +1.27%
Randgold Resources Ltd. (RRS) 6,015.00p +0.84%
Tesco (LSE: TSCO.L - news) (TSCO) 338.95p +0.10%
British American Tobacco (LSE: BATS.L - news) (BATS) 3,110.00p 0.00%
Weir Group (Other OTC: WEIGY - news) (WEIR) 1,863.00p 0.00%
SABMiller (SAB (LSE: SAB.L - news) ) 2,844.50p -0.02%
Smiths Group (LSE: SMIN.L - news) (SMIN) 1,180.00p -0.08%
Morrison (Wm) Supermarkets (MRW) 264.40p -0.08%
FTSE 100 - Fallers
Evraz (EVR) 260.30p -2.51%
Eurasian Natural Resources Corp (LSE: ENRC.L - news) . (ENRC) 273.90p -2.46%
Barclays (BARC) 260.85p -2.23%
BAE Systems (BA.) 340.90p -2.04%
Fresnillo (FRES) 1,842.00p -1.92%
Diageo (DGE) 1,815.00p -1.81%
Vedanta Resources (Other OTC: VDNRF - news) (VED) 1,135.00p -1.73%
Anglo American (LSE: AAL.L - news) (AAL) 1,855.00p -1.67%
Wood Group (John) (WG.) 734.50p -1.67%
Burberry Group (Other OTC: BBRYF - news) (BRBY) 1,227.00p -1.60%
FTSE 250 - Risers
Stobart Group Ltd. (STOB) 105.20p +3.65%
Raven Russia Ltd (LSE: RUS.L - news) (RUS) 64.00p +1.91%
Jupiter Fund Management (JUP) 285.30p +1.17%
Redrow (RDW) 163.20p +0.93%
Telecity Group (LSE: TCY.L - news) (TCY) 782.50p +0.90%
Temple Bar Inv Trust (TMPL) 1,000.00p +0.81%
SVG Capital (Other OTC: SVGCF - news) (SVI) 286.00p +0.63%
Talvivaara Mining Company (LSE: TALV.L - news) (TALV) 107.30p +0.56%
Kentz Corporation Ltd (LSE: KENZ.L - news) . (KENZ) 392.00p +0.54%
Domino's Pizza Group (DOM) 496.60p +0.49%
FTSE 250 - Fallers
Kenmare Resources (LSE: KMR.L - news) (KMR) 30.76p -3.12%
Shanks Group (LSE: SKS.L - news) (SKS) 82.35p -2.83%
Soco International (LSE: SIA.L - news) (SIA (SES: E1:C6L.SI - news) ) 345.10p -2.82%
William Hill (Other OTC: WIMHF - news) (WMH) 347.30p -2.55%
Spectris (SXS) 2,001.00p -2.39%
Fidessa Group (LSE: FDSA.L - news) (FDSA) 1,482.00p -2.37%
ITE Group (LSE: ITE.L - news) (ITE) 237.40p -2.06%
Vesuvius (VSVS) 345.20p -1.93%
Synthomer (SYNT) 189.10p -1.77%
Ruspetro (RPO) 75.21p -1.75%