FTSE held back by blue-chips and miners

London trading was weighed down by falls in major stocks trading ex-dividend, outweighing strong performances by financial stocks.

The FTSE 100 closed down 0.64 per cent or 30.04 points at 6,052.29, as BP, GlaxoSmithKline, International Power, Royal Dutch Shell, Sage Group and Unilever all lost their payout attractions.

"After Tuesday's leap to multi-year highs, a bit of a hangover today is inevitable, though without the ex-dividend factors the FTSE would be higher," said Ben Barty-King, head of options trading at ETX Capital.

The fallers were led by International Power, which fell 21.48 per cent to 330.4p as investors traded without the right to its 92p special dividend.

Investec adjusted its target price for the utility to 416p, down from 538p, and repeated its "buy" rating.

Household products giant Reckitt Benckiser fell 5.08 per cent to 270p after missing its fourth-quarter forecasts.

“Household products provider Reckitt Benckiser could well need their Nurofen headache pills after today’s market reaction to this year’s profit numbers.

“The company fell short of analyst expectations, even though profits were 13 per cent higher than 2009,” said Michael Hewson, market analyst at CMC Markets.

Insurers benefited from upbeat investor sentiment, with Prudential up 2.24 per cent to 731.5p as Societe Generale upgraded it to "buy" from "hold" and named it the broker's preferred stock in the sector, replacing Aviva.

Resolution also rose 1.39 per cent to 270.5p.

Mining stocks lost ground later in the day on falling metals prices, led by Kazakhmys, down 3.27 per cent to 1,569p and followed by Anglo American, African Barrick Gold and Vedanta.

In the FTSE 250, the London Stock Exchange rose 3.14 per cent to 920p after saying it was buying the Toronto Stock Exchange.

“Shareholders appear to have lapped up the news, buying strongly into LSE’s shares, forcing prices as high as 950p, a level not seen since September 2008,” Nick Serff, market analyst at City Index said.

And Bluetooth specialist CSR gained ground after announcing it would pay its first-ever dividend alongside strong fourth-quarter results.

“CSR shares saw a high degree of buyer demand after reporting figures that beat market expectations,” Serff said.

The markets didn’t react to news that Chancellor George Osborne has finalised a bank lending and bonus deal, Project Merlin, today.

“London’s blue chip index remained somewhat unaffected by the news,” Hewson said.

Instead, all eyes are on Thursday’s Bank of England interest rate decision, which could see rates rise for the first time in almost two years.

“MPC members appear to be stuck between a rock and a hard place at the moment,” said Serff.

“Most of the market is pricing in an interest rate hike in either May or September later this year. Whilst no action is expected from tomorrow’s decision, the Bank of England has surprised the market before so traders need to be on their guard.”