London midday: Gains trimmed after gloomy EU growth forecasts

- EC cuts GDP estimates across the board.- RBS, Capita lead risers after full-year results.- German IFO survey comes in at six-month high.After a strong start, gains for the Footsie were pared by lunchtime after the European Commission cut its forecasts for economic growth. The market reaction to a flurry of company results on the top-tier index has been mixed with Capita and Royal Bank of Scotland (RBS) rising strongly and RSA Insurance and British American Tobacco (BATS) among the fallers.The European Union (EU) is set to experience stagnating growth this year, and the euro area will undergo a mild recession, according to the interim forecast published by the European Commission (EC). As expected, growth estimates for 2012 were cut largely across the board today. The EC comments in its press release that the "unexpected stalling of the recovery in late 2011 is set to extend into the first two quarters of 2012", with the EU registering zero growth this year and the Eurozone registering a 0.3% contraction. However, EU Commissioner for Economic and Monetary Affairs Olli Rehn, does note that there are signs of a recovery and modest growth is predicted to return in the second half of this year. "Many of the steps that were essential to deliver financial stability and to establish the conditions for more sustainable growth and job creation have now been taken. With decisive action, we can turn the corner and move from stabilisation to boosting growth and jobs," he said. Meanwhile, sentiment was lifted early on after Germany's IFO business climate indicator for February came in at a six-month high of 109.6 points, up from 108.3 in the previous month, according to the German IFO Institute based in Munich. The market consensus was looking for a reading of 108.8. It is the fourth consecutive monthly increase. RBS, CAPITA TOP THE CHARTS AFTER RESULTSThe biggest news of the day centred around RBS which rose strongly early on despite widening losses in 2011. Provisions for mis-selling of payment protection insurance schemes and Greek debt ensured part-nationalised lender made a pre-tax loss of £766m in 2011, compared with a loss of £399m in 2010, though the core business was profitable at the operating level. Results were broadly in line with expectations, according to Nomura."RBS Core profits - the ongoing bank - were £6bn, comparing well with others and representing a return on equity of 10.5%. The reduction in our balance sheet since 2008 now exceeds £700bn with all other 'safety' measures improving strongly," said Group Chief Executive Stephen Hester. Sector peers Barclays and Lloyds were also in demand, with the latter's results due out tomorrow.Capita was the second-best performer by midday after the outsourcing giant said that it expects revenue growth to accelerate in 2012 after a "reasonable" level of growth last year. Turnover grew by 7% from £2,744m to £2,930m in the year ended December 31st, slightly ahead of Panmure Gordon's forecast of £2,900m.Leading the downside was RSA Insurance after its full-year results disappointed. Profit before tax came in at £613m, a gain of 29% on the previous year, 8% below consensus estimates according to Nomura. Net asset value came in 3% below forecasts also. The broker highlighted that RSA's 2012 guidance now implies that around a 15% reduction to consensus pre-tax profit forecasts now needs to be made.BATS fell despite seeing revenues rise 3% to £15,399m in 2011. The company said that volumes fell 0.4% during the year, and expressed concerns about various proposals around the world to introduce so called "plain packaging", which BATS argues will play into the hands of criminal gangs which smuggle cigarettes. Gas and electricity provider Centrica rose after aying that it had put in a resilient performance in challenging conditions in 2011. Revenue edged up to £22.8bn from £22.4bn in 2010, ahead of market expectations of £21.9bn. FTSE 250: BODYCOTE SURGES 15%Shares in metals and alloys treatment firm Bodycote raced ahead after it said profit surged 68% helped by strong demand at its aerospace and defence unit and robust sales overseas. The group said despite economic headwinds, particularly in Europe, the business would continue to make progress in the coming year. Meanwhile, Cookson, the materials science firm, rose after selling its American precious metals business to Richline, an offshoot of Warren Buffetts's Berkshire Hathaway vehicle.Among the fallers was construction, services and property group Kier which this morning unveiled a 4.6% fall in total revenue for the six months ended December 31st. Following suit was bus and train operator Go-Ahead posted a 13% drop in half year pre-tax profit and remains cautious about the wider economic outlook.BCFTSE 100 - RisersRoyal Bank of Scotland Group (RBS) 28.70p +5.01%Capita (CPI) 720.50p +4.65%Serco Group (SRP) 559.50p +3.80%Fresnillo (FRES) 1,836.00p +3.32%Ashmore Group (ASHM) 397.90p +2.95%Randgold Resources Ltd. (RRS) 7,440.00p +2.69%Lloyds Banking Group (LLOY) 36.33p +2.57%Vedanta Resources (VED) 1,410.00p +2.17%Antofagasta (ANTO) 1,345.00p +1.97%Aggreko (AGK) 2,197.00p +1.81%FTSE 100 - FallersRSA Insurance Group (RSA) 108.50p -3.56%International Consolidated Airlines Group SA (IAG) 161.20p -2.42%Hargreaves Lansdown (HL.) 455.50p -2.04%Man Group (EMG) 129.60p -1.59%Sainsbury (J) (SBRY) 300.20p -1.54%BAE Systems (BA.) 319.90p -1.54%ICAP (IAP) 389.80p -1.34%Morrison (Wm) Supermarkets (MRW) 291.40p -1.32%SSE (SSE) 1,281.00p -1.23%Carnival (CCL) 1,881.00p -1.16%FTSE 250 - RisersBodycote (BOY) 386.40p +14.66%Cookson Group (CKSN) 672.00p +5.00%Informa (INF) 434.50p +4.17%Heritage Oil (HOIL) 192.90p +4.16%Filtrona PLC (FLTR) 430.90p +4.08%Gem Diamonds Ltd. (DI) (GEMD) 252.40p +3.61%Premier Farnell (PFL) 223.40p +3.52%Babcock International Group (BAB) 760.50p +3.19%Petropavlovsk (POG) 760.50p +3.12%Senior (SNR) 193.70p +2.87%FTSE 250 - FallersKier Group (KIE) 1,375.00p -7.66%Go-Ahead Group (GOG) 1,266.00p -4.60%Kesa Electricals (KESA) 78.50p -2.67%Supergroup (SGP) 565.00p -2.59%Talvivaara Mining Company (TALV) 278.00p -2.18%Genus (GNS) 1,216.00p -2.09%FirstGroup (FGP) 297.20p -1.98%Cranswick (CWK) 823.00p -1.85%Mitchells & Butlers (MAB) 267.70p -1.58%Ophir Energy (OPHR) 386.20p -1.48%