Disappointing production data from the Eurozone dampened stocks on Wednesday morning in London, but a better-than-expected reading of US retail sales saw markets rally off their lows in afternoon trade.
The monthly measure of American retail sales increased by 1.1% in February, an acceleration from the 0.2% growth the month before and well ahead of the 0.5% rise expected by analysts. This was the largest increase in five months, owing mainly to a sharp rise in petrol prices.
"Concerns over the widening disparity in economic data emanating from different Eurozone constituents sparked selling in early trade as indices retreated from their highs, before bouncing with US futures at midday," explained Matt Basi, the Head of UK Sales Trading at CMC Markets.
Industrial production in the single-currency euro area dropped by 0.4% month-on-month in January, compared with the prior months' 0.9% gain and the 0.1% fall expected by analysts. Output from the wider European Union also turned negative in January, falling 0.4%.
Meanwhile, a debt auction in Italy saw long-term funding costs rise as the Treasury sold its close to its maximum target of three-year and 15-year bonds.
Also weighing on markets this morning were ex-dividend stocks which were accounting for 10.71 points of the fall alone, as traders were unable to get their hands on the most recent payouts from a number of big-hitters, including Standard Chartered.
FTSE 100: Prudential rockets after strong full-year results
Shares in Prudential soared today after the company smashed consensus forecasts with its 2012 results, in which it unveiling a 16% hike in the dividend following a 54% surge in pre-tax profit. The stock has now risen nearly 30% so far in 2013 but analyst Kevin Ryan still sees some upside. He said: "Prudential has been transformed since 2010 into a strongly cash-generative business; the outperformance of the stock is likely to continue."
Supermarket group Sainsbury was a high riser after Barclays Capital said it expects an "encouraging sales growth figure" when the company gives a fourth-quarter trading update next week. The broker expects like-for-like sales growth of 2.6% which "would represent the strongest quarter of the year for Sainsbury and in fact the strongest quarter since 3Q10/11".
Energy firm Centrica was higher after Nomura shifted its target price on the stock from 335p to 350p, retaining a 'neutral' rating. The broker said that the company still should have headroom for an average of £400m per annum of share repurchases from 2014 to 2016. "We do not think this is in consensus", the broker said.
Meanwhile, emerging markets lender Standard Chartered was among the worst performers on the day after going ex-dividend, along with British American Tobacco, Hargreaves Lansdown, Land Securities, Meggitt and Serco.
Mining stocks such as Evraz, Kazakhmys, Antofagasta and Vedanta were heavy fallers as metals prices weakened. Kazakhmys was nearing a four-year low today ahead after losing £750m from its market capitalisation over the last 10 days in the aftermath of last month's disappointing results which signalled a sharp rise in costs in 2013. The stock is expected to exit the FTSE 100 at the end of the week in the latest quarterly reshuffle.
Security solutions group G4S was out of favour after announcing the resignation of Chief Financial Officer (CFO) Trevor Dighton. The news came as the firm unveiled a 10.4% rise in 2012 revenues despite taking a hit over its London Olympic contract blunder.
FTSE 250: SDL rebounds after disappointing results
SDL was on the rebound after a sharp fall yesterday on the back of a 19% decline in its 2012 profit before tax.
Leading the downside on the second-tier index were the miners: gold miner Petropavlovsk declined after Westhouse Securities cut its target price on the stock from 480p to 440p, although it retained a 'buy' recommendation; iron ore producer Ferrexpo was a heavy faller after announcing a 20% decline in group revenue last year.
Hochschild Mining and Kenmare Resources were also heavy fallers.
FTSE 100 - Risers
Prudential (PRU) 1,125.00p +9.33%
Sainsbury (J) (SBRY) 358.00p +2.52%
Lloyds Banking Group (LLOY) 51.37p +1.52%
ITV (ITV) 129.90p +1.41%
Intu Properties (INTU) 331.80p +1.31%
Experian (EXPN) 1,177.00p +1.29%
Pearson (PSON) 1,199.00p +1.10%
Rolls-Royce Holdings (RR.) 1,063.00p +1.05%
Tate & Lyle (TATE) 829.00p +0.97%
Amec (AMEC) 1,061.00p +0.86%
FTSE 100 - Fallers
Standard Chartered (STAN) 1,721.00p -3.77%
Evraz (EVR) 251.00p -3.72%
British American Tobacco (BATS) 3,491.00p -3.38%
Kazakhmys (KAZ) 533.50p -3.35%
ARM Holdings (ARM) 920.00p -3.16%
Antofagasta (ANTO) 1,095.00p -3.01%
Aggreko (AGK) 1,839.00p -2.49%
G4S (GFS) 299.90p -2.47%
Vedanta Resources (VED) 1,169.00p -2.26%
Rio Tinto (RIO) 3,377.00p -2.03%
FTSE 250 - Risers
Man Group (EMG) 102.20p +4.07%
SDL (SDL) 458.80p +3.33%
BTG (BTG) 342.60p +3.10%
Home Retail Group (HOME) 132.90p +2.63%
Smith (DS) (SMDS) 233.20p +2.51%
Redrow (RDW) 175.00p +2.34%
Petra Diamonds Ltd.(DI) (PDL) 122.70p +2.25%
BBA Aviation (BBA) 254.80p +2.00%
Regus (RGU) 158.00p +1.94%
Synthomer (SYNT) 218.70p +1.77%
FTSE 250 - Fallers
Hochschild Mining (HOC) 317.50p -8.40%
Ferrexpo (FXPO) 203.50p -7.50%
Premier Farnell (PFL) 224.40p -5.04%
Provident Financial (PFG) 1,574.00p -4.89%
Domino Printing Sciences (DNO) 678.00p -4.71%
Petropavlovsk (POG) 238.50p -4.37%
Anite (AIE) 129.50p -4.00%
COLT Group SA (COLT) 122.00p -3.94%
Ocado Group (OCDO) 137.40p -3.65%
William Hill (WMH) 406.00p -3.47%