US and China GDP data weighs on FTSE

Revised US economic forecasts and disappointing GDP figures from China hit European markets in early trading on Thursday, with the FTSE falling 0.6%.

Shortly after opening, the index was down 32 points, or 0.6%, at 5,222, with the French Cac and German Dax also slipping 0.4% and 0.25% respectively.

The US Federal Reserve yesterday predicted US GDP would expand by 3% to 3.5% this year, rather than the 3.2% to 3.7% rate previously projected.

Meanwhile, the pace of growth in China slowed in the second quarter. The country's economy grew by 10.3% between April and June, above the government's growth target but well below the 11.9% growth rate during Q1.

The slowdown came as the impact of a government stimulus package faded.

Miners led the pullback in London, with Kazakhmys, Vedanta Resources and Xstrata all losing 2%.

Beleaguered oil giant BP lost 1.3% after a US Congressional committee agreed measures which may ban the company from new offshore drilling for seven years.

The House committee on natural resources voted in favour of precluding companies with poor safety records from offshore oil exploration permits.

Although BP was not named, the measures would apply to any company that has experienced 10 or more deaths in the last seven years.

Asian markets were hit by the US growth forecast cut, with Japan's Nikkei 225 Stock Average falling 109 points, or 1.1%, to 9,685.53 at close in Tokyo.

Overnight in New York, the Dow Jones closed marginally in the black, gaining 3.7 points to close at 10,366.