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.
The index has rallied more than 50 per cent since hitting a low in early March, and is up 17 per cent this year.
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. BP, Royal Dutch Shell and BG Group dropped 1.4 to 1.5 per cent.
Disappointment that Chinese growth data, though robust, offered few surprises and a background of softer metals prices weighed on the mining sector. Antofagasta, Fresnillo, Kazakhmys and Randgold Resources fell 1.8 to 3.8 per cent.
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. HSBC shed 1.8 per cent, with Barclays, Royal Bank of Scotland and Standard Chartered falling between 0.7 and 1.6 per cent.
Lloyds Banking Group, 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.
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.
Index heavyweight Vodafone, up 3.4 per cent, was boosted by US telecoms peer AT&T, which posted better-than-expected third-quarter profit. The stock was also pushed up by a big “long-only buyer”, traders said.
Fixed-line operator BT Group was up 1.5 per cent.
On the second tier, pub groups notched up good gains, with Enterprise Inns, Punch Taverns and Marstons 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 “beer tie” arrangement.
Shares in Next and Marks & Spencer fell 0.9 and 1.6 per cent, respectively, after disappointing retail sales data.