Mining gains offset retail weakness
The FTSE was broadly flat in early trading with a bounce back in the mining sector helping to offset weaknesses among blue chip retailers like Marks & Spencer.
Official figures which yesterday saw the UK’s GDP figures revised down have hit investor sentiment while energy stocks are coming under pressure from volatile oil prices.
But European stocks overall bounced back after hitting a three-week low as rallying mining shares offset losses in the energy sector, where Total extended its slide, hit by worries over a gas leak in the North Sea.
The FTSEurofirst 300 index of top European shares was up 0.05 per cent, with Total down by around one per cent.
On London’s blue chip index miners kept the market stable with Rio Tinto – which earlier in the week put its diamond business up for sale – lifting by 2.5 per cent.
Fresnillo was also up more than two per cent while Polymetal was up more than 1.5 per cent. It was boosted by an upgrade to “buy” from “neutral” by UBS.
Steelmaker Evraz was up by a similar level, bouncing back after losses triggered by its warning over tough markets yesterday.
Another significant riser was Imperial Tobacco, up 1.7 per cent after this morning reporting solid first quarter earnings.
Marks & Spencer was the biggest faller, off by 1.6 per cent with fellow retail heavyweight Next also down more than one per cent.
Other stocks to slip were Scottish and Southern Energy (1.3 per cent) and British Land (1 per cent).
In banking Lloyds edged down 0.4 per cent while Barclays and RBS lost 0.6 per cent.
Lloyds’ dip came as the Co-Operative Group, which has offered to buy 632 of its ret retail bank branches, said the offer remained non-binding, with many analysts speculating the deal could still fall apart.
On the FTSE 250 transport groups were the biggest casualties after disappointing figures in an update from Firstgroup. The bus and train service operator said that its UK bus business was finding it tough.
Shares in Firstgroup fell 15.7 per cent.
Rivals Stagecoach and Go-Ahead were down 3.3 per cent and 4.2 per cent respectively while National Express was off by 2.1 per cent.
In Asia the Nikkei closed down 0.6 per cent and the Hang Seng 1.3 per cent.
Meanwhile in UK economic news house prices suffered their sharpest monthly fall in more than two years in March, as first-time homebuyers braced for the removal of stamp duty exemption, mortgage lender Nationwide said.