BRITAIN’S top share index fell yesterday, led down by banks, but finished well off session lows on fresh hopes for economic recovery after strong US pending home sales data.
The FTSE 100 closed 11.98 points or 0.2 per cent lower at 5,151.32, having dropped as low as 5,072.53. The index fell 0.5 per cent on Tuesday.
Pending sales of previously owned US homes rose more than expected in April as prospective home owners took advantage of a popular tax credit.
“The US is strengthening, so we’re seeing a bit more investor appetite,” said Matthew Brown, sales trader at ETX Capital.
UK banks, blighted by recent Eurozone debt problems, lost more ground, with Barclays, Lloyds Banking Group and Royal Bank of Scotland off as much as 3.6 per cent.
Among individual movers, insurer Prudential fell 2.5 per cent after it abandoned its plan to buy AIG’s Asian life unit for $35.5bn, leaving management under fire and the company facing a $659m bill for failure.
BP ended the session 0.1 per cent weaker, having bounced back from the day’s lows, after falling 13 per cent the previous session.
The US government has launched a criminal and civil investigation into BP’s massive oil spill in the Gulf of Mexico.
Sentiment across the sector, which has been hit by the long-term implications of the catastrophe, remained subdued. Oil explorer Cairn Energy was down 1.8 per cent, while Tullow Oil lost 0.3 per cent.
In what was a choppy session, defensively perceived issues -- companies whose earnings tend to remain stable under difficult economic conditions -- found favour.
Drugmaker GlaxoSmithKline added two per cent, helped by an upgrade to “buy” from “hold” by brokerage Jeffries.
Peers AstraZeneca and Shire added 1.3 and 2.8 per cent respectively.
Diageo gained 1.1 per cent after JP Morgan upped its target price for the spirits group.
Vodafone, National Grid, Marks & Spencer and Intertek Group fell after going ex-dividend.