Shares fall to day lows as US GDP disappoints

Shares added to earlier losses in afternoon deals after data showed the US grew less than expected in the second quarter.

The FTSE 100 was down 46 points, or 0.87%, to 5,266 after news that the world's largest economy grew 2.4% on an annualised basis in the three months to the end of June, less than the 2.5% increase that economists had forecast.

The main US index, the Dow Jones Industrial Average, fell 76 points to 10,389 as the data shows the US economy is still growing but confirms the rate of growth has slowed.

The economy expanded by an annualised rate of 3.7% in the first quarter.

Economists said the slowdown reflected a surge in imports and weak growth in consumer spending but also highlights the important contribution from government stimulus spending, which increased to an annualised rate of 9.2% in the second quarter, compared to 1.8% in the first.

Oil groups and miners featured heavily on the loser board as investors fretted about what a slowing global economy might mean for metal prices and for prospects for the sector.

Vedanta shares retreated 61p to £24.18 despite reporting a record first quarter operating profit. Anglo American fell 6p as global concerns overshadowed its update and news it is resuming dividend payments. 

Utilities provided some cheer in the otherwise downbeat market after French group EDF sold its UK power grid business, boosting interest across the sector.

United Utilities topped the risers, up 29p at 589.5p, followed by Severn Trent and National Grid up 35p at 13.15 and 4p at 514.5p.