FTSE hit by poor services figures - London Report

BRITAIN’S top equity index slightly underperformed its Eurozone peers yesterday as a survey of the dominant services sector came in sharply below forecasts.

The blue-chip FTSE 100 index was up 0.3 per cent at 6,950.46 points at the close, compared with rises of 0.6 to 0.8 per cent for the Paris CAC 40 and Frankfurt DAX.

While the UK data pointed to another subdued round of overall economic growth in the second quarter, retail stocks rose and energy shares got a lift from a low US crude oil inventories figure.

“There’s more potential in the UK than before the election...and although I have concerns over the sterling and the effects of a rate rise we should see a recovery in miners and UK banks throughout the year,” said Arran Lamont, of Kola Capital.

Property and utility stocks lost ground: British Land fell 1.5 per cent, real estate rival Land Securities retreated 1.4 per cent while utility National Grid was down 0.7 per cent.

Traders said those sectors were being hit by a pick-up in British government bond yields, which rose along with German bond yields after a surprise increase in European inflation data.