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LONDON (Alliance News) - London stock indices slipped lower Wednesday, with the FTSE 100 slipping below the 7,000 mark for the first time since it reached the milestone last Friday and the FTSE 250 snapping a run of ten successive sessions of gains, amid lack of drivers on a day when Jeremy Clarkson was removed as presenter of Top Gear.

London's blue-chip index fell 0.4%, closing at 6,990.97. The FTSE 250 also closed down 0.4% at 17,502.31, and the AIM All-Share index fell 0.6% to 717.40.

However, James Hughes, chief market analyst at eToro, believes that this dip could act as a catalyst for buyers and UK stock markets remain in good health.

"Yet again we would be reminded of the fact that the UK is sitting in a position where inflation is low, growth is good, unemployment levels are good, and average earnings are moving higher (slowly). Overall the equity market still looks in good shape despite a directionless drift lower," Hughes said.

Grabbing attention amid a relatively quiet market, broadcaster BBC dropped popular but controversial presenter Clarkson following his physical attack on a senior producer. BBC director general Tony Hall said the decision to end Clarkson's contract was taken after a disciplinary investigation "with great regret," but he added that "a line has been crossed" by the presenter.

Liberum said in a note to clients that ITV could benefit were they were able to bring Clarkson on board. The broker said a Top Gear style show with Clarkson could boost ITV's audience share, advertising revenue and worldwide sales. Nevertheless, ITV shares failed to buck the market trend and closed down 1.0%.

European stocks performed worse than London, with the CAC 40 in Paris closing down 1.3% and the DAX 30 in Frankfurt down 1.2%.

At the European equity market close, Wall Street also was trading lower, with the DJIA down 1.1%, the S&P 500 down 0.9%, and the Nasdaq Composite down 1.7%.

However, shares in Kraft Foods Group soared after it agreed to merge with HJ Heinz Co to create a food giant to be named The Kraft Heinz Co, which will be the fifth-largest food and beverage company in the world. The deal was financed by a USD10 billion investment from private equity firm 3G Capital and Warren Buffett's Berkshire Hathaway, the combination that had taken Heinz private for about USD23 billion in 2013. Kraft was up 41% at the close of London equity trade.

The dollar weakened against its major trading partners after much weaker than expected US durable goods orders in February. The report from the Commerce Department said durable goods orders fell by 1.4% in February following a downwardly revised 2.0% increase in January. The drop in orders came as a surprise to economists, who had expected orders to climb by 0.7% compared to the 2.8% jump that had been reported for the previous month.

Oil prices had begun to drift higher in the trading session but took a hit when US EIA crude oil stocks for the week ending March 20 came in higher than expected. The report from the Energy Information Administration said inventories grew by 8.2 million barrels, more than the estimate of a 5 million barrel increase, but less than the 9.6 million increase the week before.

At the close of London equity markets Brent oil traded at USD55.75 a barrel, and West Texas intermediate was quoted at USD48.32 a barrel.

Nevertheless, oil producers were amongst the best performers in the FTSE 100, with BG Group up 1.7%, Royal Dutch Shell 'A' up 1.4% and BP up 1.0%.

However, TUI Group was the biggest FTSE 100 gainer, closing the day up 2.6%. The travel operator said its winter season is closing out as expected, with average selling prices up by about 1%, while bookings and average selling prices for the key summer season are currently up by about the same amount, meaning it's on track to deliver first-half results that are up on the year on a like-for-like basis. It said it is also confident of delivering underlying operating profit growth of 10% to 15% for the year as a whole.

BT Group was another favoured stock, up 1.1%. The company announced the launch of new 4G mobile data bundles for its existing broadband customers on a SIM-only basis, its first foray back into the consumer mobile space in over a decade.

It announced three plans on a 'bring-your-own-phone' basis, meaning it will not provide mobile devices, including deals which provide its BT Sport service for free. The deals are exclusive to broadband customers, although it said BT Mobile customers can also access BT Sport via a mobile application, even if they don't have BT broadband.

Barclays, down 2.5%, closed as one of the worst blue-chip performers after it was cut to Hold from Buy by Investec. The broker said the bank has greater exposure than its UK domestic peers to the increase in the UK bank levy announced by UK Chancellor of Exchequer George Osborne.

Hunting was the biggest gainer in the FTSE 250 after Goldman Sachs upgraded it to Buy from Neutral, with a price target increase to 622.00 pence from 432.00p. The stock closed up 6.9% at 534.50p.

Balfour Beatty, up 5.5%, was another strong mid-cap stock, despite reporting a wider loss for 2014 as it booked another writedown against its struggling construction business and it moved further to shore up its balance sheet by scrapping its dividend. Chief Executive Leo Quinn admitted it will take another two years to turn the business around. Analysts welcomed the extra details about Quinn's turnaround plans as the CEO targeted initial cost cuts of GBP100 million and cash flow improvements of GBP200 million over the next two years.

Bellway closed up 2.7% after it reported surging pretax profit and revenue for the first half, boosted by a rise in completions on the back of resilient London property market, and it said reservations were up 10% on the year in the first few weeks of the current financial year.

Card Factory ended as one of the biggest fallers in the FTSE 250, down 4.7%. The card and gifts retailer reported higher pretax profit for its last financial year, as revenue growth was driven mainly by new store openings and its online business Getting Personal, but sales growth from existing stores slowed as it was hit by stiff competition and a decline in boxed Christmas card sales.

Moneysupermarket.com Group shares lost 3.4%. Citigroup Global Markets said founder Simon Nixon has decided against proceeding with a planned share sale which would have raised him around GBP100 million. Citigroup did not provide any reason for the move.

Eclectic Bar Group was the worst performer in the AIM All-Share index, down 43%. The company reported a wider pretax loss despite an uptick in revenue as it was hit by less student drinking, increased competition, and underperforming new sites.

In the economic calendar Thursday, German Gfk consumer confidence is at 0700 GMT, French fourth quarter GDP is at 0745 GMT and UK retail sales is at 0930 GMT. In the afternoon, US initial and continuing jobless claims is at 1230 GMT, ahead of Markit services and composite Purchasing Managers' index at 1345 GMT.

In the corporate calendar, International Public Partnerships and AMEC Foster Wheeler report full-year results, while newly listed DFS Furniture reports half-year results. Budget airline easyJet issues a trading statement as does Euromoney Institutional Investor and Daily Mail and General Trust.

By Neil Thakrar; neilthakrar@alliancenews.com; @NeilThakrar1

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