FTSE down as miners struggle but banks rally

The FTSE 100 failed to track gains on Wall Street and in Asia overnight as the mining sector pegged the index back.

Traders and investors were digesting a raft of economic data from across the globe and assessing whether the economic recovery was gaining traction.

Miners were hit by figures from China showing that its export orders had fallen — a slowing which hit commodity prices. Copper fell as a result.

UK data showed that manufacturing shrank at its fastest pace for two years in August as export demand dwindled.

Meanwhile Britain's banks could see earnings slashed by nearly a third according to reforms proposed by John Vickers and his independent commission on banking, according to analysts. They will have several years to implement the reforms.

Banks were the biggest risers on the FTSE 100 as some fund managers assessed that they are undervalued after taking a battering amid market turbulence and controversy over increasing regulation.

RBS was up 6.9 per cent while Lloyds rose by 5.8 per cent and Barclays 4.9 per cent.

The biggest loser on London's blue chip index was the mining sector with Eurasian, Fresnillo and Xstrata among the top five fallers, all shedding around two per cent.

Platinum miner Lonmin was the biggest faller, down just over two per cent.

Randgold fell 0.6 per cent as Oriel Securities cut its rating on the firm to "hold" from "add" and cut earnings forecasts after the gold miner's downbeat production update yesterday.

Meanwhile ITV shed 1.5 per cent as Nomura downgraded its rating for to "neutral" from "buy".

Outsourcer Serco was also down this morning hit with its stock losing around 1.8 per cent.

Fund manager Hargreaves Lansdown jumped by 6.7 per cent after a trading update in which it said that it was weathering market volatility well.

Tullow Oil was up around 0.4 per cent, the fastest climber outside the financial sector.

The Nikkei in Japan closed 1.18 per cent up and the Hang Seng 0.25 per cent.