Jitters ahead of Bank’s Inflation Report as miners, banks and energy shares lose

BRITAIN’S top shares were lower yesterday as investors nervously awaited the outcome of the Bank of England’s quarterly Inflation Report due today and commodity shares were hit by demand concerns following weak Chinese data.

At the close, the FTSE 100 index was down 34.11 points, or 0.6 per cent, at 5,376.41, having ended at its highest close since 13 May on Monday.

Miners were big fallers, retracing Monday’s gains as base metal prices fell on demand concerns after weak Chinese imports data yesterday, and ahead of Chinese inflation numbers due today.

Vedanta Resources, Xstrata, and Antofagasta were top sector fallers, down 3.0 to 4.0 per cent.

“Gravity pulled the market lower, in thin volume as investors hugged the sidelines awaiting the Fed news,” said Mic Mills, head of electronic trading at ETX Capital.

Energy shares were lower in London as crude prices fell back towards $80 a barrel. BP shed 3.1 per cent.

Banks were also poor blue chip performers, falling back as recent strength following the first-half reporting season evaporated.

Royal Bank of Scotland was the worst off, down 3.8 per cent as Credit Suisse cut its rating to “neutral” from “outperform” after results last week.

Europe’s biggest travel firm TUI Travel was the top FTSE 100 faller, down 10 per cent after it said it expected its full-year profit to be at the lower end of expectations.

Mid-cap peer Thomas Cook fell 7.4 per cent, and blue chip Carnival Cruises lost 3.9 per cent.

Connaught rose 21.8 per cent to 13.4p, in a brief respite for the housing firm after losing more than 90 per cent of its value since June.