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LONDON (Alliance News) - The FTSE 100 ended lower Tuesday, reversing the gains made in the previous three sessions, as an equities sell-off in the US overnight fed through into the European session.

London's blue-chip index hit a fresh record intraday high on Monday, but remains susceptible to pullbacks amid investor nerves about the UK election that's hurting sectors like energy and housebuilders in particular, as well as the ongoing standoff between Greece and its creditors.

The FTSE 100 ended down 1.0% at 7,030.53, while the FTSE 250 closed down 0.7% at 17,659.39, and the AIM All-Share index closed down 0.2% at 753.85.

Europe's main indices fell further, with CAC 40 in Paris down 1.8% and the DAX 30 in Frankfurt down 1.9%.

When the European equity markets closed, Wall Street was mixed as indices started taking back earlier losses. The DJIA and the S&P 500 were up 0.1% and the Nasdaq Composite was still down 0.1%. The indices had dropped 0.2%, 0.4% and 0.6%, respectively, on Monday.

UK economic growth slowed more than expected in the first quarter, a preliminary estimate published by the Office for National Statistics revealed. Gross domestic product expanded 0.3% sequentially in the three months to end-March, the slowest growth since the fourth quarter of 2012. The growth rate was forecast to slow to 0.5% from 0.6% logged in the fourth quarter of 2014.

However, the preliminary estimates of UK first quarter growth are likely to be upgraded as the services sector may have grown better than expected, the British Chambers of Commerce said.

Output of the dominant service sector gained 0.5%. Nonetheless, it was slower than the prior quarter's 0.9% growth. Meanwhile, construction and production declined 1.6% and 0.1%. Agriculture output was down 0.2%.

"Although we expected a slowdown in GDP growth, following weak construction and production figures, the scale of the decline estimated by the ONS understates the true momentum in the economy," BCC Chief Economist David Kern said.

"It is likely that the services sector rose by more than 0.5% - in particular we are sceptical that business and financial services output was broadly flat in the quarter. It would not be surprising if this estimate was upgraded in due course," he added.

Greece's troubles remained in the spotlight after Prime Minister Alexis Tsipras warned that he would hold a referendum if international creditors insisted on a "vicious circle of austerity" as the key to unlocking urgently needed bailout money, the Financial Times reported.

Although there were "great possibilities for winning this negotiation", Tsipras said he would go directly to the Greek people if the terms were unacceptable to Athens. "If the solution offered goes beyond our mandate, it will have to be endorsed by the people," the FT quoted him saying in a late night interview with Star Television.

CMC Markets analyst Jasper Lawler believes that the current situation in Greece cannot continue as it is.

"It's hard to imagine the Greek people effectively voting for the country to default or leave the Eurozone, but it's not like staying in the Eurozone is doing them much good at the moment. Local government accounts and public pensions are being plundered just to make debt payments, a situation that can't, and shouldn't, carry on for long," Lawler says.

The first quarter earnings season was in full swing in London Tuesday.

Standard Chartered was amongst the worst-performing stocks in the FTSE 100, closing down 3.2%, after the emerging markets bank reported a 22% drop in first quarter pretax profit, due to pressure on operating income and higher charges for bad loans. It said it made a USD1.47 billion pretax profit in the quarter ended March 31, compared with USD1.88 billion a year earlier.

The lender's results for the first quarter follow a tough year for the bank, which has been hurt by weaker sentiment towards emerging markets, lower commodity prices, and low interest rates set by central banks. Tougher regulations following the global financial crisis of 2007-09 have increased costs for the sector as a whole, while a UK levy on banks' global balance sheets has raised questions about whether the London-headquartered emerging markets bank might be better off if it moved out of the UK.

St James's Place, down 2.8%, closed lower despite reporting an increase in funds under management in the first quarter of its financial year, after taking in GBP1.30 billion of net inflows, boosted by higher limits for individual savings accounts and greater flexibility for people saving for retirement in the UK.

London's mining sector provided some of the support for the FTSE 100 as commodity prices rose. Gold miners Fresnillo, up 2.1%, and Randgold Resources, up 1.0%, climbed on the back of a rise in gold prices as investors headed to the safe haven amid the equity market decline. The yellow metal was trading at USD1,212.40 an ounce when the London equity markets closed.

In the FTSE 250, Acacia Mining, up 3.7%, and Centamin, up 3.4%, were two of the three best performing stocks.

BP closed down 0.2% having been higher for most of the day. The oil and gas major said its pretax profit for the first quarter of 2015 after its exploration and production division was hit by the lowest quarterly oil price since the start of 2009, and by reduced activity, partially offset by higher earnings at the division which produces fuels and lubricants.

BP reported a pretax profit of USD2.27 billion for the first quarter of 2015, down from USD5.27 billion a year earlier, as revenue tumbled to USD54.92 billion from USD92.98 billion.

However, analysts at Liberum noted that BP's underlying replacement cost profit of USD2.58 billion, a figure stripping out non-operating items and fair value accounting effects, came in well ahead of consensus of USD1.28 billion and Liberum's expectation of USD1.59 billion.

FTSE 250-listed Allied Minds ended down 3.0% after it reported a wider loss for 2014 as it spent more on research and development, even though its key value measure rose strongly. It reported a net loss of USD45.5 million for 2014, compared with a loss of USD34.5 million a year earlier, as a rise in both R&D and selling, general and administrative expenses more than offset a rise in revenue to USD7.7 million from USD2.9 million.

Pinnacle Technology closed up 26% as the best performer in the AIM All-Share index. The company said it had raised about GBP0.9 million by placing 13.2 million new shares at 6.5 pence each, a placing that was done to facilitate a strategic investment by MXC Capital.

MXC said it subscribed for 5.9 million of the placing shares, which gives it a 10% stake in Pinnacle's enlarged share capital. It said it has also been granted seven-year warrants over a further 5% of Pinnacle's share capital. Pinnacle's shares closed at 7.10p. MXC Capital shares closed up 5.4%.

In the economic calendar Wednesday, the eurozone economic bulletin is released at 1000 BST along with business and economic sentiment survey results. The German consumer price index reading is at 1300 BST, before US GDP at 1330 BST and pending home sales at 1500 BST. After the close of London stock markets, the US Federal Reserve will announce its interest decision at 1900 BST.

In another busy UK corporate calendar, there are first-quarter interim management statements from Next, British American Tobacco, Weir Group, Barclays, London Stock Exchange Group and TSB Banking Group. Home Retail Group issues full-year results as does online fashion retailer N Brown, while Redefine International and Spirit Pub Company report half year results. Standard Life issues a trading statement and Antofagasta releases a first quarter production report. GlaxoSmithKline reports first quarter results at 1200 BST.

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

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