views

THE LONDON REPORT

THE benchmark share index closed flat yesterday as a retreat in financials and miners, triggered by weak US data, was offset by stronger energy stocks, after a &ldquo;giant&rdquo; oil find by BP.<br /><br />The FTSE 100 index ended down 2.15 points at 4,817.55, after it fell 1.8 per cent on Tuesday.<br /><br />US private employers cut 298,000 jobs in August according to the ADP National Employment Report.<br /><br />&ldquo;Investors are looking for excuses to take profits and the (ADP data) gives more cause for concern about prospects for the world&rsquo;s biggest economy,&rdquo; said Jeremy Batstone-Carr, an analyst at Charles Stanley.<br /><br />Banks, whose performance typically closely mirrors wider risk appetite, suffered as confidence ebbed that the UK and global economies are heading for a swift rebound.<br /><br /><strong>Lloyds Banking Group</strong> was the hardest hit in the sector, down 6.2 per cent, after it emerged the lender has won backing from its investors to raise &pound;10bn to reduce its dependence on the taxpayer.<br /><br /><strong>Royal Bank of Scotland, Barclays, HSBC</strong> and <strong>Standard Chartered</strong> shed between 0.6 and 4 per cent.<br /><br />Also among financials, life insurers were weaker, with <strong>Legal &amp; General, Aviva, Old Mutual</strong> and <strong>Prudential</strong> shedding between 2.1 and 8.7 per cent.<br /><br />The benchmark index rose 6.5 per cent in August overall, and is up 39 per cent since hitting its lowest level in over six years in March.<br /><br />Also fuelling caution about the economic outlook, US factory orders rose a smaller-than-expected 1.3 per cent in July.<br /><br />&ldquo;Macro data has moved to centre stage and given the rise in share prices, investors now need to see proof in the real economy that things are improving.&rdquo;<br /><br />Mining stocks took the most points off the blue-chip index, as the capitulated to the pressure of softer metals prices, with <strong>Antofagasta, Lonmin, Kazakhmys</strong> and <strong>Rio Tinto</strong> down between 1.6 and 4.3 per cent.<br /><br />But energy stocks gained after oil major <strong>BP</strong> made a &ldquo;giant&rdquo; oil discovery in the Gulf of Mexico and as crude oil prices held near $68 a barrel after registering falls in the previous session.