FTSE falls ahead of BoE decision

BRITAIN’S top share index lost 0.6 per cent, snapping a three-session winning streak with investors turning cautious ahead of today’s Bank of England monetary policy decision and Friday’s US jobs report.

At yesterday’s close, the FTSE 100 index was 30.16 points lower at 5,253.15 after a see-saw session, having reversed from an intraday peak of 5,305.41.

The index had gained 2.7 per cent in the three sessions following a near three-month low hit last Thursday.

“After a trio of good gains, investors paused for a breather with the BoE decision and US non-farms on the horizon. A return to the 5,300 level for the FTSE seems too big a mountain to conquer just yet, especially with the miners stumbling,” said Mic Mills, senior trader at ETX Capital.

Weakness in mining issues weighed on blue chips with Antofagasta, Lonmin, Rio Tinto, Xstrata and BHP Billiton off 0.8 to three per cent as metal prices fell back as the dollar strengthened after US data.

The US ADP National Employment Report came in better than expected, but the US Institute for Supply Management was slightly below the median forecast. The mixed data, together with some disappointing earnings news, notably from drugs firm Pfizer, weighed on US blue chips, which were off 0.4 per cent by London’s close.

Pharmaceuticals issues were weak in London, with AstraZeneca the top FTSE 100 faller, down 3.6 per cent, trading ex-dividend, and also impacted by fears it may release negative clinical trial results for experimental bowel cancer drug Recentin.

Morgan Stanley said Recentin was likely to fail in a head-to-head trial against Roche’s Avastin. Drugs peer GlaxoSmithKline fell 0.7 per cent ahead of results due on Thursday while Shire shed 0.4 per cent.

Among individual blue chip fallers, BAE Systems fell two per cent as Goldman Sachs added the defence firm to its “Conviction Sell” list having cut its target and estimates.

Banks were lower, reversing earlier gains reflecting worries over eurozone debt.