Weak banks and miners pull FTSEdown by one per cent

THE FTSE 100 share index ended 1 per cent lower yesterday, with mining and energy stocks suffering as the US dollar rose and commodity prices fell, while a sharp decline in <strong>ING</strong> put pressure on financials.<br /><br />The index ended down 50.83 points at 5,191.74, having risen as high as 5,281.12 earlier in the session. It closed 0.7 per cent firmer on Friday.<br /><br />The index has surged 50 per cent from a six-year low in March, though is still about 4 per cent below its level in mid-September 2008 before the collapse of <strong>Lehman Brothers</strong>.<br /><br />&ldquo;You&rsquo;ve got profit taking, you&rsquo;ve got a resistance of 5,300, you&rsquo;ve got dire GDP numbers on Friday (last week) and you&rsquo;ve got companies still going cap in hand to shareholders,&rdquo; said Angus Campbell, head of sales at Capital Spreads.<br /><br />&ldquo;All these factors are coming into play and we haven&rsquo;t been assisted in any shape or form by a weak start to trading on Wall Street,&rdquo; he said.<br /><br />Banks were lower, led by part-nationalised banks <strong>Lloyds Banking Group</strong> and <strong>Royal Bank of Scotland,</strong> off 7.2 per cent and 5.7 per cent respectively, with investors unsettled by moves from European peer ING to split in two and launch a &euro;7.5bn rights issue. <br /><br />Sector heavyweight HSBC lost 1.8 per cent, impacted by a downgrade to &ldquo;hold&rdquo; from &ldquo;buy&rdquo; by Citigroup, while <strong>Barclays</strong> shed 2.5 per cent.<br /><br />Barclays bought the banking arm of British insurer <strong>Standard Life</strong> for &pound;226m to build up its UK mortgage and savings business. <br /><br />Standard Life was off 1.5 per cent, while its peers were also weaker, weighed down by the ING news, with Legal &amp; General down 1.7 per cent and RSA Insurance 0.5 per cent lower.<br /><br /><strong>Prudential</strong>, down 3.2 per cent, also fell victim to a broker downgrade with SG Securities cutting its rating to &ldquo;hold&rdquo; from &ldquo;buy&rdquo; on valuation grounds.<br /><br />&nbsp;Miners were under pressure, retreating as the US dollar rose and metals prices waned.<br /><br /><strong>Rio Tinto, BHP Billiton, Antofagasta </strong>and<strong> Vedanta Resources</strong> lost 1 to 1.5 per cent.<br /><br />It was a similar story with energy stocks, with crude prices below $79 a barrel.<br /><br /><strong>BG Group, Royal Dutch Shell</strong> and <strong>Cairn Energy</strong> dropped 0.2 to 2.4 per cent.<br /><br />Among individual movers, <strong>British Airways</strong> fell 4.8 per cent after a report in the Financial Times said the airline, along with <strong>Iberia</strong> and <strong>American Airlines</strong>, may have to give up airport take-off and landing slots to satisfy EU conditions for a proposed tie-up.<br /><br />Deutsche Bank also downgraded its stance on BA to &ldquo;sell&rdquo; from &ldquo;hold.&rdquo;<br /><br />Gains in defensive stocks helped anchor the FTSE 100 yesterday, as economic concerns resurfaced, prompting investors to look to assets perceived as safe bets.<br /><br />Household cleaning products firm <strong>Reckitt Benckiser </strong>put on 0.5 per cent, while <strong>British American</strong> <strong>Tobacco</strong> added 0.2 per cent.<br /><strong>Cable &amp; Wireless</strong> rose 3.3 per cent after a press report said it has revived plans for a &pound;3.6bn demerger.