THE FTSE 100 closed lower on yesterday as banks fell after US banking earnings failed to meet some expectations, while miners tracked metal prices down.
The index ended down 0.6 per cent, or 33.15 points at 5,222.95, retreating from a 56-week closing high set on Wednesday.
Although third-quarter earnings from Goldman Sachs and Citigroup came in better than analysts’ forecasts, they were disappointing relative to the much stronger than expected results from JPMorgan on Wednesday.
Barclays, HSBC, Standard Chartered, Royal Bank of Scotland and Lloyds Banking Group fell 0.4 to 2.1 per cent.
Miners fell with profit takers moving in as metal prices retreated. Rio Tinto, Lonmin, Anglo American and Fresnillo fell 0.7 to 4.1 per cent.
Anglo American was the biggest faller, down 4.1 per cent, after rival Xstrata said it would not make a formal takeover offer.
Energy stocks were lower as investors banked profits, though oil prices continued to climb. BG Group, Royal Dutch Shell, BP and Cairn Energy shed 0.6 to 2.4 per cent.
Tullow Oil, which said in a drilling update the Mahogany-4 well off Ghana had found oil, dropped 2.3 per cent.
The FTSE 100 has surged 51 per cent from a six-year trough in March, but is still 3.6 per cent below its level in mid-September 2008 before the collapse of Lehman Brothers.
Sterling racked up its biggest one-day gain against a basket of currencies in nearly a year after Monetary Policy Committee member Paul Fisher said that the Bank of England’s interest rate cuts and injection of money into the economy were working.
Food retailer J Sainsbury topped the FTSE leaderboard, up 10.1 per cent with traders citing talk of a bid from Qatar, though Sainsbury and the Qatar Investment Authority declined to comment.
Trading in Sainsbury shares was frenetic with volumes more than nine times the average of the last 90 trading days.
The news helped peers Tesco and Wm Morrison rise 1.7 and 1.8 per cent respectively.
Life Insurers were also in demand after Nomura issued a bullish note on the sector.
Aviva, Prudential and Legal & General, which were the broker’s top European picks, rose 0.6 to 1.1 per cent, while Friends Provident and Standard Life climbed 1.3 and 0.8 per cent respectively.