By Matt West and This Is Money Reporter
Shares in London remain lower this afternoon after Chinese policymakers signalled their concern about the country's prospects as they unveiled a number of moves designed to boost growth, including tax breaks for small businesses.
The Footsie has parred losses to some extent however and shares are now 0.54 per cent lower at 6,584.6 having been off yesterday's close by more than 1 per cent earlier in the day.
Half an hour into the trading day in the US, the Dow Jones Industrial Average has retreated from its record high and is lower by 0.27 per cent at 15,499.95 with investors given a mixed bag of economic data ahead of the opening bell.
Subdued: The Footsie has held on near seven week highs but the market is quiet as investors wait on crucial GDP data
Planned US.business spending rose more than expected in June and new orders for long-lasting manufactured goods surged, offering tentative signs of a pickup in economic activity.
The Commerce Department said non-defense capital goods orders excluding aircraft, a closely watched proxy for business spending plans, increased 0.7 percent after rising by a revised 2.2 percent in May.
But, the number of Americans filing new claims for jobless benefits rose slightly last week in a sign the US labor market continues to improve at a moderate pace.
Initial claims for state unemployment benefits increased by 7,000 to a seasonally adjusted 343,000, the Labor Department said, although the figure remains below the critical 350,000 weekly claims figure suggesting the economy is still growing albeit slowly.
Cheer over Britain's economic performance in the second quarter have failed to provide a boost to the London market today as Chinese growth concerns put blue chips under pressure.
Official figures revealed the UK economy grew by 0.6 per cent in the three months to the end of June, following a 0.3 per cent increase in the previous three months - the first time since 2011 that the UK has seen back-to-back quarterly increases.
But the FTSE 100 Index has fallen more than 1 per cent, down 74.7 points to 6545.7, with the good economic news failing to offset worries over China after policymakers signalled their concern about the country's prospects when they unveiled a number of moves designed to boost growth, including tax breaks for small businesses.
It comes after a slowdown in the country's growth rate in the last two quarters.
The pound has remained largely steady after the UK gross domestic product figures, which showed all the main sectors of the economy grew for the first time since the third quarter of 2010, adding to hopes for a recovery. Sterling stood at $1.53 and ?1.16.?
Among stocks, Rolls-Royce has continued to power ahead after the engine giant's first half results topped City expectations and it reported improving demand.
The company is 4 per cent, or 42p higher, to a multi-year high of 1222p, after a 15 per cent rise in its order book to almost ?70billion as its pre-tax profits rose 34 per cent to ?840million during the first six months of the year.
In a busy session for corporate updates, shares in BT are 3 per cent lower as it revealed higher restructuring costs pushed bottom-line profits down 16 per cent to ?449 million in its first quarter.
But underlying figures were slightly better-than-expected, with profits up 5 per cent to ?595million, while it also said that more than half a million people have signed up to its new sport channels before their launch next month. Shares are 9.1p lower at 332.9p.
Miners have beenhit hard by the China growth concerns amid fears over a drop off in demand, with Fresnillo leading the sector's falls, down 55p to 1014p.
Drinks giant SAB Miller, the maker of Miller Genuine Draft and Peroni Nastro Azzuro, is also in the red as it said cold weather hit demand for its beers across developed markets, slowing the rate of revenue growth to 2 per cent in its first quarter. SAB shares have fallen 114.5p to 3125.5p.
Consumer goods giant Unilever has joined it on the fallers board with a fall of 54p to 2664p after signalling slowing growth in its emerging markets, which overshadowed an 18 per cent rise in first half pre-tax profits to ?3.7billion (?3.2billion) on a constant currency basis.
The Footsie is currently 68 points, or 1 per cent, lower at 6,552.5 with concerns over China weighing on investor sentiment.
Miners have fallen 1.5 per cent on London's blue chip index this morning as investors took a cautious stance on the sector's second quarter earnings prospects, pocketing gains of 3.6 per cent over the last five days
The threat of oversupply, cooling demand growt - particularly from China which is the world's largest commodity consumer- and stalled asset sales has cast a cloud over the sector's heavyweights, with all except BHP Billiton set to report big profit drops for the six months to June.
Lonmin reported an 8 per cent dip in third-quarter production today.
Overnight China unveiled a number of moves designed to boost growth, including tax breaks for small businesses as policymakers showed the first signs of concern over the economy's growth prospects following a slowdown in the country's growth rate in the last six months.
On a heavy day for earnings, in other sectors Anglo-Dutch consumer goods company Unilever has fallen 1.8 per cent after missing his forecasts for second quarter sales.
Chip designer ARM Holdings has been the top faller on the FTSE 100, down 4.6 per cent and testing its 200-day moving average around 850 pence after its US customer Broadcomm overnight forecasted lower-than-expected third-quarter revenue.
Traders said bearish comment from Deutsche Bank and UBS, which removed ARM from its key call list, was also weighing on the shares, which trade on a 12-month forward price-to-earnings of 37 times.
Despite a rally of 9.5 per cent since its late-June low, on a forward 12-month price-to-earnings valuation, the FTSE 100 trades on 11.9 times, compared with the 10-year average 12.24 times.
The FTSE 100 index did not react to as-expected data showing Britain's economy grew twice as fast in the second quarter as in the first.
Shares in London are slightly lower despite official figures showing the UK economy grew by 0.6 per cent in the three months to the end of June.
The Footise is down 22 points at 6598.4 with news that policymakers in China have signalled? concern about the country's growth prospects pegging back progress.
China unveiled a number of moves designed to boost growth, including tax breaks for small businesses. It comes after a slowdown in the country's growth rate in the last six months.
08:00am (Open): Britain's top shares index has held near seven-week highs early this morning as a raft of upbeat corporate earnings from the likes of Rolls Royce provided support for recent market gains.
The FTSE 100 was flat at 6,622.63. Investors were holding their breath until? 9:30am when official economic estimates for the three months to the end of June are released.
City analysts are expecting GDP growth to have doubled in the period to around 0.6 per cent taking growth in the economy to 0.9 per cent so far for the year it's fastest growth for nearly a year.
Elsewhere there are a host of trading updates from some of Britain's largest blue chip companies.
Already out are Rolls-Royce which saw its share price rise 3.6 per cent, or 35.5p, to 1215.5p, after it beat expectations with a 34 per cent rise in first half profits to ?840 million during the first six months of the year.
Rolls also reported a 15 per cent rise in its order book to almost ?70billion.
In a busy session for corporate updates, shares in BT were slightly lower after it reported slightly better-than-expected profits of ?595 million for the first quarter of its financial year, a rise of 5 per cent.?
It also said that more than half a million people have signed up to its new sport channels before their launch next month but higher restructuring costs pushed bottom-line profits down 16 per cent to ?449million. Shares were 3.5p lower at 338.5p.?
Low-cost airline easyJet extended gains, rising 2 per cent the day after it increased full-year guidance as brokers such as HSBC and Citigroup raised target prices for the firm.
Although the sample is small, of the UK-listed companies who have already reported second quarter results, 67 per cent have beaten analysts' earnings expectations, compared with 51 per cent in Europe, according to Starmine data.
STOCKS TO WATCH:
Credit Suisse reported net profit for the second quarter rose nearly 33 per cent on the year, on a rise in both stock and bond trading from its investment bank.
Barclays: The UK lender?s share price fell yesterday on talk that it would have to raise funds at first half results on Tuesday, to meet the Prudential Regulation Authority's leverage ratio.
Barclays is close to reaching a deal with regulators to comply with a new leverage requirement by December 2014 and a confirmation is expected along with its annual results.
Miners: The threat of oversupply, cooling demand growth and stalled asset sales will cast a cloud over earnings for the world's largest miners, with all except BHP Billiton set to report big profit drops for the six months to June.
Lonmin: The platinum miner met expectations with an 8 per cent dip in third-quarter production on Thursday, bruised by strike disruptions, but said it was on track to meet its full-year guidance.
Kazakhmys: The Kazakh miner said copper production edged up just over one percent in the second quarter, as higher volumes of ore mined offset lower grades, keeping it on track to hit full-year guidance.
Johnson Matthey: The chemicals maker says first-quarter profit rose 8 percent and guidance for the year as a whole remains unchanged.
Glaxosmithkline: The British drugmaker has agreed to pay $229 million to settle lawsuits brought by eight US states related to improper marketing of its Avandia diabetes drug.
Reed Elsevier: The Professional publishing and events group beat forecasts for first-half earnings on Thursday and reiterated its full-year outlook saying it expected further revenue and earnings growth this year.
Capita: Britain's biggest outsourcing company posted a 10 per cent rise in first-half profit and said it was confident for the rest of the year after winning a record 2 billion pounds worth of new contracts in the first half of the year.
Unilever: The Angle-Dutch consumer goods company reported underlying sales growth of 5 per cent for the second quarter, just shy of market expectation, and said that growth was slowing in emerging markets.
SSE: The British utility, one of the country's largest investors in energy infrastructure, said today that current government policy does not provide sufficient incentives to make new investment decisions.
BT Group: More than half a million customers have signed up to take BT's new sports service, the group said on today, as it reported a final set of results under Ian Livingston to cap off his five-years at the helm.
Cable and Wireless Communications: The telecoms firm said the group trading performance remains in line with the outlook indicated at its 2012/13 results.