views

THE LONDON REPORT

The FTSE 100 closed one per cent, or 50.49 points, lower yesterday at 5,207.36, as weaker crude and metals weighed on energy stocks and miners.<br /><br />The index has rallied more than 50 per cent since hitting a low in early March, and is up 17 per cent this year.<br /><br />Energy stocks suffered with crude slipping below $81 a barrel as a stronger dollar encouraged investors to take profits from a 12-month high hit on Wednesday.<strong> BP, Royal Dutch Shell </strong>and<strong> BG Group</strong> dropped 1.4 to 1.5 per cent.<br /><br />Disappointment that Chinese growth data, though robust, offered few surprises and a background of softer metals prices weighed on the mining sector.<strong> Antofagasta, Fresnillo, Kazakhmys </strong>and<strong> Randgold Resources</strong> fell 1.8 to 3.8 per cent.<br /><br />Banks were also in the doldrums, following weakness on Wednesday in their US peers after an influential bank analyst recommended selling Wells Fargo shares, and the Financial Services Authority issued a raft of proposals to reform the industry yesterday.<strong> HSBC</strong> shed 1.8 per cent, with <strong>Barclays, Royal Bank of Scotland </strong>and<strong> Standard Chartered</strong> falling between 0.7 and 1.6 per cent.<br /><br /><strong>Lloyds Banking Group</strong>, however, put on 3.6 per cent to top the FTSE leaderboard, on talk that it was close to securing backing for a cash call.<br />Lloyds is planning to launch a rights issue and refinancing next week provided it can persuade regulators and the government to agree to a deal before the weekend.<br /><br />Index heavyweight <strong>Vodafone</strong>, up 3.4 per cent, was boosted by US telecoms peer AT&amp;T, which posted better-than-expected third-quarter profit. The stock was also pushed up by a big &ldquo;long-only buyer&rdquo;, traders said. <br /><br />Fixed-line operator<strong> BT Group</strong> was up 1.5 per cent.<br /><br />On the second tier, pub groups notched up good gains, with <strong>Enterprise Inns, Punch Taverns </strong>and<strong> Marstons</strong> up 23 per cent, 14.8 per cent and 3 per cent respectively, after the Office of Fair Trading gave the go-ahead for the industry to continue operating its &ldquo;beer tie&rdquo; arrangement. <br /><br />Shares in <strong>Next</strong> and <strong>Marks &amp; Spencer</strong> fell 0.9 and 1.6 per cent, respectively, after disappointing retail sales data.