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Insurers fail to lift the FTSE as investors await US results

BRITAIN&rsquo;S leading shares closed lower yesterday as falls in oil majors and food retailers offset gains in insurers as investors waited for the start of the earnings seasons in the US to give a fresh direction.<br /><br />The FTSE 100 closed down 29.08 points, or 0.6 per cent, at 5,108.90, after ending 2.3 per cent higher on Tuesday on growing confidence over the outlook for the global economy.<br /><br />Oil majors took the most points off the index, with <strong>BP, BG Group, Royal Dutch Shell</strong> and <strong>Tullow Oil </strong>off 1.2 to 2.9 per cent as investors took profits in the sector.<br /><br />Trading on Wall Street was mixed ahead of the start of the earnings season, which US aluminium giant <strong>Alcoa</strong> was due to kick off after markets closed yesterday.<br /><br />The FTSE 100 has risen 48 per cent since hitting a floor in March on hopes of a recovery in the economy and analysts predict that the rally may still have some fuel to push higher after raking in hefty gains in the third quarter of the year.<br /><br />&ldquo;With the FTSE continuing to trade above the 5,000 mark, it seems that investors are willing to let this latest bout of recovery continue before hitting the sell button,&rdquo; said Anthony Grech, a market strategist at IG Index.<br /><br />Food retailers dipped as<strong> J Sainsbury</strong> fell 3.3 percent after releasing its second-quarter trading update, which met forecasts with a slight slowdown in quarterly sales growth. Peers <strong>WM Morrison</strong> lost 0.8 per cent, while <strong>Tesco</strong>, which posted its first-half results on Tuesday, shed 2.3 percent.<br /><br />Among other individual stocks, <strong>Vodafone</strong> dipped 2 per cent, dented by a fall in India telecom stocks and the possibility of a tariff war.<br /><br />Hip and knee specialist <strong>Smith &amp; Nephew</strong> fell 2.7 per cent as UBS downgraded its recommendation on the stock to &ldquo;neutral&rdquo; from &ldquo;buy&rdquo;, citing caution over the growth of the orthopaedic market.<br /><br /><strong>Aviva</strong>, which rose 3.8 per cent, led life insurers higher. The company announced plans for a secondary listing on the New York Stock Exchange on October 20.<br /><br />The sector has been high on investors&rsquo; wanted list recently due to M&amp;A speculation. <strong>Standard Life, Prudential </strong>and <strong>Old Mutual </strong>gained 1.4 to 2 per cent.<br /><br /><strong>Intercontinental Hotels</strong> rose 3.3 percent, supported by an upgrade by Citigroup to &ldquo;buy&rdquo; from &ldquo;hold&rdquo;.<br /><br />Banks were mixed. <strong>HSBC </strong>and <strong>Barclays</strong> rose 0.6 and 0.1 per cent, respectively, while <strong>Royal Bank of Scotland</strong>, <strong>Lloyds Banking Group</strong> and <strong>Standard Chartered</strong> shed 0.9 to 2 per cent.<br /><br />HSBC, Europe&rsquo;s largest bank, said it would be forced to delay raising its dividend if new capital rules were applied too heavily or quickly, the Times reported the bank&rsquo;s head of investment bank as saying.<br /><br /><strong>Kingfisher</strong> rose 1.9 per cent after UBS upgraded its recommendation on Europe&rsquo;s largest home improvement retailer to &ldquo;buy&rdquo; from &ldquo;neutral&rdquo; and Morgan Stanley upped its stance to &ldquo;equal-weight&rdquo; from &ldquo;underweight&rdquo;.