Retreating miners offset a strong day for banking sector
A retreat in mining stocks offset gains in financials from Bank of America’s decision to repay bailout funds, leaving Britain’s top share index down 0.3 per cent at yesterday’s close.
The FTSE 100 shed 14.39 points to end at 5,313.00, after gaining 0.3 percent on Wednesday.
Banks were the top risers with sentiment helped by Bank of America announcement it would hand back $45bn of government rescue funds.
Lloyds Banking Group, Royal Bank of Scotland, Barclays and Standard Chartered rose 1.2-4.7 per cent.
Volumes were thin with investors reluctant to take big positions ahead of key US data.
“We now seem to slipping in to a lull with all major indices lacking a bit of direction,” said James Hughes, market analyst at CMC Markets.
“It is now likely that traders are taking stock ahead of tomorrow’s key jobs report.”
A poll of analysts by Reuters forecast that there would be a 130,000 fall in November US Non-farm payrolls compared with 190,000 seen the previous month.
The White House has seen evidence that the US November unemployment rate might creep upward from October’s level, a spokesman said.
Life insurers were back in favour as investors moved back into financials, with Legal & General, Prudential, Aviva, and Standard Life rallying 0.5-4.1 per cent.
But heavyweight miners were the biggest drag on the blue-chip index, reversing earlier gains as the gold price slipped back after hitting fresh record highs on Thursday, and other metal prices steadied after recent advances.
Xstrata, Fresnillo, Rio Tinto, Lonmin, and Anglo American shed 0.6-2.1 per cent.
Oils were also weaker, though crude prices held firm near $77 a barrel following falls on Wednesday.
BP, BG Group, and Tullow Oil lost 0.6-3 per cent, but Royal Dutch Shell and Cairn Energy rose 0.3 per cent and 0.6 per cent respectively.
Among individual gainers, Kingfisher added 0.8 per cent after Europe’s biggest home improvements retailer beat third-quarter profit forecasts and said it was cutting debt more quickly than expected.
British Airways climbed 1.9 per cent after it said it carried 4.3 per cent fewer passengers in November year-on-year but pledging that its pension fund deficit would not scupper a planned merger with Iberia.
Britain’s service sector grew more slowly than expected in November, a purchasing managers’ survey showed, but new business continued to pick up and firms were optimistic.
The Chartered Institute of Purchasing and Supply/Markit activity index fell to 56.6 last month from October’s two-year high of 56.9.
That was the seventh consecutive month above the 50 level that indicates expansion but below expectations for a rise to 57.
The European Central Bank kept rates steady at a record low of 1 per cent.