FTSE weighed down by banks and UK economic data, despite energy surge

BRITAIN’S top shares closed lower yesterday, weighed by banks which slipped after recent strength, while retailers fell on downbeat UK economic data, countering gains in energy stocks.

The FTSE 100 closed down 15.42 points or 0.3 per cent, at 5,540.14, having fallen 0.2 per cent in the previous session. That was its first daily decline in five sessions after hitting a four-month high of 5,567.41 on Tuesday.

“I’m amazed at how resilient it (the FTSE) is ...any weakness and it looks like someone is there to mop it all up,” Simon Clark, senior trader at ETX Capital, said.

“We need a healthy sell-off, not massively, but a bit of profit-taking then we’ll go again.”

Retailers reversed early gains after data showed British retail sales volumes fell last month for the first time since January, raising concern that consumer demand is starting to slip ahead of the UK government’s spending review in October.

Marks & Spencer, Next, and Home Retail Group lost 0.3 to 0.9 per cent.

The sector had found support early on as DIY firm Kingfisher, up 0.4 per cent, became the latest retailer to defy macro economic conditions after its first-half profit beat forecasts, helped by cost-cutting.

After a gain of almost 9 per cent for the FTSE 100 in the last three weeks, most investors seemed happy to sit on the sidelines.

Banks waned following recent strength, with Royal Bank of Scotland and Lloyds Banking Group falling 2.5 percent and 1.3 per cent respectively.

The Bank of England said inflation expectations for the next 12 months rose to 3.4 per cent last month, up from 3.3 per cent in May.

And the CBI’s monthly industrial trends survey showed factory orders unexpectedly fell in September.