US slowdown fears send FTSE 100 lower

(Close): The FTSE 100 ended the day sharply lower following weaker US consumer confidence and disappointing corporate results.

The index fell 1%, or 73.45 points, to 7,030.53, with St James's Place the biggest faller, down 3.4% to 875.5p.

The wealth manager had reported inflows for the first quarter that were slightly below forecasts.

Investors were also spooked by a private sector report which found US consumer confidence slumped in April.

Standard Chartered was also among the fallers, slipping 3.2%.

The bank reported a 22% fall in first quarter pre-tax profits to $1.48bn.

Andy Ash, head of sales at ADM Investor Services, said: "There'a a bit of bad news. It's just a bit of froth [being taken] off the market."

On Monday the FTSE 100 closed at a new record high of 7,122.74.

Shares in AstraZeneca dropped 3.3% after US rival Merck managed to get a diabetes drug to pass heart-safety tests, which analysts said put Astra at a disadvantage.

The news also hit pharmaceutical group Shire, with its shares ending down 3.15%.

Anglo American was the top riser, adding 2.3% to 1129p.

BP ended the day down 0.2% after rising as much as 1.5% following a fall in first quarter profits that was not as severe as had been feared.

"BP's refinery business is booming, and it is helping to offset the weak profits from the upstream business," said David Madden, market analyst at IG.

Shares in Whitbread fell 2.6%, despite reporting an 18% profit rise and announcing plans to expand its successful Costa coffee chain.

News of a slowdown in the UK economy hit the pound at first, although sterling later recovered.

Latest figures from the Office for National Statistics showed the economy expanded by 0.3% in the first quarter of the year, which was lower than expected and half the 0.6% rate recorded in the previous quarter.

The pound was up 0.6% against the dollar at $1.5326 and 0.3% lower against the euro at €1.3955.