Chinese economic worries leave FTSE mired in the red

Fears that China may take potential monetary policy action to ease inflation and therefore dent demand for commodities saw metal prices drop sharply, sending blue chip miners into the red.

Early session falls on America's Dow Jones Industrial Average added to the downbeat sentiment and left the wider FTSE 100 Index closing down 31.80 points at 5593.85.

And in currency news, the pound slipped against the dollar after another round of opinion polls fuelled anxiety over the prospect of a hung parliament.

US stocks fell after sentiment was impacted following news that Moody's believes the US could eventually lose its top-notch credit rating.

This came after mixed reports on manufacturing, with data showing it slowed in New York in March, while another revealed a rise in nationwide industrial production last month.

American investors also fretted over the strength of the economic recovery and energy demand, which knocked oil prices below 80 dollars for the first time in nearly two weeks.

Wall Street anxiety was compounded further ahead of a new banking bill due to be unveiled in the US today, with increasing uncertainty over whether the bill would get the necessary support from the Senate.

Credit card delinquency rates slipped or held firm at five major US lenders last month, showing fewer Americans are falling behind on bills and suggesting the worst of consumers' stress may be over.

Charge-off rates were mixed at Capital One Financial Corp, Bank of America Corp, Discover Financial Services, JPMorgan Chase & Co and American Express, according to regulatory filings.

The delinquency rates, which stabilised in January, signal it is less likely that the card issuers will have to write off bad loans in the future. Charge-offs are loans the companies do not expect to be repaid.

In London, blue chip miners accounted for most of the top 10 fallers, led by Eurasian Natural Resources, down 40 to 1133p.

But elsewhere, BT and Morrisons were making gains in the wake of favourable broker comment, up 13/8p to 1243/4p and 3/8p to 295p respectively.

Centrica advanced to the top of the risers' board thanks to Nomura raising its rating on the British Gas parent, with shares 43/4p higher at 2943/4p.

Royal Bank of Scotland gained 1/8p to stand at 423/4p after reports said the part-nationalised firm was among those lined up to work on an initial public offering worth 800 million euros by German chemicals company Brenntag.

Among other top flight movers, BSkyB slipped 14p to 584p on fading speculation that Rupert Murdoch's News Corp is planning to take the satellite broadcaster private. The media group already owns around 40 per cent of BSkyB.

While Citigroup named Morrisons as its preferred pick of the supermarket sector, it also lifted its price target on Tesco and Sainsbury, causing shares in Tesco to improve by a marginal 0.05p to 4353/8p, although Sainsbury dropped 1/4p to 3321/2p.

Outside the top flight, shares in French Connection surged more than 9 per cent, or 43/4p to 463/4p, after it sold its Nicole Farhi brand and refused to rule out a return to private ownership.

The company posted losses of 24.9m for the year to January 31, up from 16.4m the previous year.

The biggest Footsie risers were Centrica, Shire ahead 17p to 1466p, BT Group and Admiral up 13p to 1251p.

The biggest Footsie faller was ENR.