FTSE down as gloom over current account deficit overshadows economic growth data
Gloom over the state of the nation's finances pushed the London market lower, despite data showing the UK economy grew faster in 2015 than previously thought.
Official data showed the current account deficit had hit its highest level since records began, widening to £32.7 billion or 7% of gross domestic product (GDP) in the fourth quarter and 5.2% of GDP in 2015 as a whole.
The FTSE 100 Index fell 28.27 points to 6174.9, retreating from an almost 100-point rise on Wednesday.
But deeper early session losses were helped as oil prices rallied back, rising 54 cents to 40.59 US dollars a barrel.
The focus was on the latest economic data from the Office for National Statistics (ONS), which saw a surprise upward revision for UK growth to 0.6% in the fourth quarter of last year, up from the previous estimate of 0.5%.
Growth for the whole of 2015 was also revised higher, to 2.3% from 2.2%.
But concerns over the record current account deficit took centre stage, with the pound slipping slightly against the dollar at 1.43, while the sterling also dropped 0.4% against the euro at 1.26.
In Europe, the Cac 40 in France was down more than 1%, while Germany's Dax also fell just under 0.8%.
Among stocks, Thomson and First Choice owner TUI was the biggest blue chip riser as it said UK holidaymakers returning to old favourites such as Spain in the wake of recent terror attacks helped grow bookings.
The German travel giant said summer bookings from British sunseekers jumped by 9% year on year, allowing it to stick to its guidance of boosting full-year earnings by at least 10%.
Its shares rose nearly 5%, or 51p, to 1079p after it shifted packages away from troublespots and saw "significant growth" in mainland Spain, the Balearic Islands and the Canary Islands.
Online electrical appliance retailer AO World was among the biggest risers i n the second tier after upping its full-year outlook thanks to stronger-than-expected fourth quarter sales.
AO World is now expecting full-year underlying earnings to rise to about £17 million in the final three months to March, which is higher than the £16 million pencilled in by the market.
Shares jumped as much as 15% at one stage, but later stood at more than 3% or 6.2p higher at 179p.
Elsewhere, a consortium including outsourcing firm Secro has won a contract renewal from the Ministry of Defence to manage the UK's nuclear warheads via the Atomic Weapons Establishment through to 2025. Shares in FTSE 250-listed Serco lifted 3% or 3.2p to 102.5p.
Cruise ship giant Carnival also added to gains from the previous session when it announced a better-than-expected quarterly profit, with net income nearly trebling to 142 million US dollars (£98 million) for the first quarter to February 29.
Shares climbed more than 1% or 60p to 3752p.
The biggest risers in the FTSE 100 Index were TUI up 51p to 1079p, Glencore up 5.8p to 157.3p, Anglo American up 16.4p to 552.1p, Inmarsat up 19.5p to 984.5p.
The biggest fallers in the FTSE 100 Index were Pearson down 30.5p to 875p, Next down 160p to 5400p, Old Mutual down 3.6p to 193.1p, Barratt Developments down 10p to 560.5p.