BRITAIN’S top share index fell from a four-month closing high and ended a seven-session winning run yesterday, led lower by Barclays after management changes and miners on concerns over Australia’s tax plan.
In positive news, Invensys climbed 7.4 per cent, with traders citing a newspaper report that the engineering group is a takeover target. An Invensys spokesman declined to comment.
The FTSE 100 closed 31.37 points or 0.6 per cent lower at 5,407.82, after gaining 6.5 per cent in the previous seven sessions, and volumes were 63 per cent of its 90-day daily average.
“The market will be very range-bound between the 5,000 and 5,500 level. It’s difficult to see what will be the catalyst to enable it to break through the ceiling at 5,500,” said Tim Whitehead, head of portfolio service at Redmayne-Bentley.
“There is definitive support of the market at 4,800 on yield ground, especially with government bond yields yielding so little.”
The UK benchmark offered a dividend yield of 3.37 per cent, versus the 2.92 per cent from benchmark 10-year British gilts.
Barclays dropped 2.7 per cent after it said it had appointed Bob Diamond, the head of its investment and wealth management business, as its new group chief executive.
The appointment raised the issue of whether the lender might become more of an investment bank, a trader said.
The banking sector, down 0.7 per cent, was also hurt by renewed fears over capital reform from the Basel committee and after Wall Street Journal said the recent European bank stress tests understated some lenders’ holdings of potentially risky government debt.