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Category : Business

London’s FTSE 100 index and key European markets ended the day lower

The London stock market closed lower on Monday after weaker-than-expected data from America’s automobile heartland raised fears that the US economic recovery was stumbling.

The eagerly watched Chicago PMI – a measure of manufacturing output in the region – fell to its lowest level in 29 months. At 56.2, April’s reading was much lower than the 62.2 recorded in March, and weaker than economists had expected. A fall in new orders led to speculation that demand was faltering after a strong start to 2012.

Joshua Raymond, chief market strategist at City Index, explained that traders were already edgy ahead of the monthly US employment data due at the end of the week.

“Today’s data perhaps indicates that the US economic recovery is losing a bit of steam and therefore keeps trader sensitivities high ahead of Friday’s non-farm payrolls release,” Raymond said.

The news of Spain’s double-dip recession also weighed on the markets. The FTSE 100 lost 39 points to close at 5737 with mining stocks leading the fallers, particularly precious metals producers. Randgold lost 190p to £54.25 and Fresnillo shed 53p to £15.60. Aberdeen Asset Management ended the day as the biggest riser on the blue-chip index, as traders welcomed its 14% rise in underlying pre-tax profits in the first half of the financial year.

In other European markets, the Spanish Ibex and the Italian FTSE MIB both ended 1.3% lower, while the French Cac lost 1.5%. Germany’s Dax fared better, ending down 0.5%.

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