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Footsie slumps 2% on global growth fears

Published: 12:58 29 May 2013 EDT

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Britain's big caps took a hiding mid-week and Footsie slumped 2% to close at 6,627.

Yesterday's gains were wiped clean off as investors worry about the state of the global economy.

US bond yields have surged over the last couple of days and this along with other strong data has triggered fears that the Fed could end its stiumulus programme to boost the US economy.

This is causing waves across global markets.

In London, Utility giants were the big losers with National Grid (LON:NG.) dropping over 5%, while United Utilities Group (LON:UU.) shed 4.07%. These so called defensive dividend paying stocks get hit when rates of government bonds track higher.

Today's sell-off also comes as the OECD reduced its global growth estimate for 2013 from 3.4% to 3.1%. 

For the UK, the organisation also cut its growth forecast to 0.8% from 0.9%.

Like it's bigger brother, the junior market also got hit. The FTSE AIM  All share lost 1.49 to 726.59, while FTSE AIM 100 dropped 9.50.

On FTSE AIM, 100 the biggest loser was software services provider IDOX, which dropped 20.8% as it unveiled what it called a "disappointing" first half performance.

Trading was affected particularly in the engineering information management division, with closed orders worth less than in the first half last year.

In light of the slower than expected first half of the year, the firm now anticipates full year underlying earnings (EBITDA) will be no less than £18 million, which reflects uncertainty of timing as to when growth opportunities will crystallise.

In the small caps, Alecto Minerals (LON:ALO) shares were lifted over 31% by news that FTSE 250 mining giant Centamin (LON:CEY) had pumped £250,000 into its junior peer as a prelude to a potential joint venture between the two in Ethiopia.

Yesterday’s news that Seeing Machines’ (LON:SEE) driver fatigue monitoring system has been snapped up by Caterpillar in the American giant’s mining truck division is still providing support to the shares, up 12.5%.

Empyrean Energy (LON:EME) rose 6.38% after revealing that its Cartwright-1H well on the Riverbend project in Texas produced both gas and oil. In the first seven days the well produced 745,000 cubic feet of gas per day as well as 40 barrels of oil each day.

Other notable risers included Forte Energy (LON:FTE), up 16.48% and Rambler Metals (LON:RMM), which gained 0.54%.

Rambler said Wednesday it had made a further shipment of copper concentrate from its bulk storage facility in Canada to offtake partner Transamine.

The miner shipped a further 6,112 wet metric tonnes (wmt), with average grades of the concentrate 28.2% copper, 6.57 grams per tonne (g/t) gold and 49.62 g/t silver.

The Real Good Food Company (LON:RGD) was also lifted 5.56%.

Security specialist Westminster Group (LON:WSG) gained 3.25%.   

Announcing 2012 results yesterday, the company said it sees exciting momentum ahead as it continues to expand its global reach.

The firm is delivering on its vision, has a solid order book, growing recurring revenues, improving gross margins and clear strategic goals, it told investors.

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