FTSE slumps as investors question recovery

The FTSE opened lower in early exchanges on Wednesday on concerns global markets are outpacing the real rate of recovery.

Halting three straight days of gains which saw the FTSE hit an 11-month high, miners led the index lower. Shortly after 9.45am, the FTSE was down more than 13 points, or 0.27%, to 4,933.94.

Lonmin tumbled 4.09% to £16.42 after Merrill Lynch downgraded the company to ‘neutral' with the broker citing its recent price surge on the back of M&A speculation with Xstrata.

Eurasian Natural Resources and Antofagasta fell 2.52% to 851p and 2.03% to 748p respectively, as the price of gold threatened to dip back below the $1,000 an ounce barrier.

Elsewhere, British Airways gained 2.44% to 205.9p and Legal & General Group advanced 1.46% to 72.8p.

Oil and gas explorer BG Group rose more than 2% to £10.77 after announcing it has discovered around two billion barrels worth of oil in Brazil.

In the US, the Dow Jones closed up more than 56 points, or 0.59%, to 9,497.34, while positive investor sentiment led to the Nasdaq hitting an eleven month high, up 18 points to 2,037.

General Electric gained 4.18% to $14.45 after J.P.Morgan upgraded the stock to ‘overweight'.

Alcoa added 3.45% to $12.6, while Proctor & Gamble Co climbed 2.54% to $54.2.

However, Kraft Foods Inc plunged 5.48% to $26.56 following Cadbury's snub of the firm's £10.2bn offer. Kraft is expected to approach the chocolate giant with the offer of a sweeter deal.

Travelers Company Inc shed 2.29% to $48.97, while Bank of America Corp fell 0.41% to $17.02.

In Japan, the Nikkei lost 81.09 points (0.78%) to 10,312.14, with exporters and banks leading the retreat. Sony and Canon lagged as the yen rose against the dollar.