US fears prompts FTSE slip
Uncertainty caused by tonight's US fiscal cliff deadline quashed any celebrations over a near 6% jump for the FTSE 100 Index over 2012.
London's final session of the year reflected growing expectations that US politicians will fail to reach an agreement before steep tax increases and spending cuts begin to take effect on New Year's Day.
The FTSE 100 Index slipped 27.6 points to 5897.8 as investors took their money off the table and ditched riskier stocks on fears the US economy will be driven back into recession by the unresolved budget negotiations.
Signs that the eurozone's own debt crisis, which has occupied the headlines for much of 2012, is now less of a worry for investors helped push the FTSE 100 Index nearly 6% higher over 2012.
The benchmark index started the year at 5572.3, having seen a decline of 5.6% in 2011.
The more UK-focused FTSE 250 Index enjoyed a record year, climbing more than 22% on hopes that smaller, domestic firms will be the first to benefit from any turnaround in the fortunes of the UK economy.
The pound has also strengthened over the year, with sterling at 1.61 against the US dollar and 1.22 versus the euro.
But the increase recently prompted a warning from the Bank of England over the impact that sterling's appreciation could have on the UK's export-led recovery in 2013.
There were just a handful of London's blue-chip stocks in positive territory during a shortened final session of the year.
B&Q owner Kingfisher topped the risers board, up 2.2p to 284.1p, while defensive plays Imperial Tobacco and British American Tobacco also made gains, rising 8p to 2373p and 12.5p to 3121p respectively.
The fallers board featured defence company BAE Systems, which declined 4.1p to 336.9p, and Lloyds Banking Group after a fall of 0.8p to 47.9p.
However it has been a decent year for the part-nationalised bank, with its shares up 85% on hopes that it is closer to paying dividends again having reduced the risks on its balance sheet.
Other big risers during the year included Whitbread and ITV, although both were in negative territory during a lacklustre finish to the year - off 5p to 2447p and 0.8p to 105.2p respectively.
One of the biggest gainers of the year in the FTSE 250 Index has been Dixons Retail after the demise of competitor Comet and the success of its turnaround strategy attracted plenty of buying interest. Its shares have nearly doubled in the last year and edged up 0.04p to 28.4p today.
The biggest FTSE 100 risers were Kingfisher up 2.2p at 284.1p, Evraz ahead 2p at 258.9p, Johnson Matthey up 16p at 2376p and Wolseley ahead 18p at 2900p.
The biggest FTSE 100 fallers were Melrose Industries down 8.2p at 223.5p, Capital Shopping Centres off 7.6p at 350.2p, Wood Group down 13.5p at 726.5p and Lloyds Banking Group off 0.8p at 47.9p.
