THE LONDON REPORT
THE FTSE 100 closed marginally lower yesterday as buoyant financials struggled against disappointing US data, falls from miners and Vodafone.
The index closed 5.98 points, or 0.1 per cent, lower at 5,159.72, after a choppy day of trading, having ended Monday’s session 1.6 per cent firmer.
Miners were among the biggest laggards, with investors plagued by lingering concerns over the strength of demand from China after Anglo American said on Monday the country’s commodities growth may ease over the short-term. Lonmin, Randgold Resources, Anglo American, Xstrata and Rio Tinto all shed between 0.6 to 3.2 per cent.
It was a mixed picture among oil stocks, as crude prices rose. BG Group put on 0.5 per cent, BP was flat, while Royal Dutch Shell shed 1.2 per cent.
Real estate stocks were out of favour after Credit Suisse downgraded its view of the sector to “benchmark” from “overweight”, with British Land, Hammerson and Land Securities off 1 to 2.8 per cent.
Vodafone fell 2 per cent after it won the rights to sell Apple’s iPhone in Britain, but not until early 2010.
Financials were the strongest performers with banks mostly higher after French bank BNP Paribas joined a recent European rush to repay government aid from the credit crisis by launching a capital increase.
Barclays, Standard Chartered, Royal Bank of Scotland, Lloyds Banking Group and HSBC rose between 0.4 and 1.2 per cent.
Life insurers were in demand, with investors buoyed by takeover talk.
Legal & General was the top FTSE 100 riser, up 4.8 per cent on more bid talk following a weekend report it has prepared a defence document against a potential bid from takeover vehicle Resolution.
The speculation saw Aviva, Standard Life, Prudential and Old Mutual adding 0.3 to 3 per cent. Friends Provident, also a target for Resolution, dropped 0.2 per cent.
Compass was another big gainer, up 3.6 per cent after the world’s biggest caterer said it expected to increase full-year earnings per share by 14 per cent as new business wins, cost cuts and a weak pound helped maintain growth.