Britain's leading share index eased a touch yesterday, stalling after a recent push up to its highest level in four-and-a-half years, weighed by falls in financials and mining stocks.
Banks were the biggest sector fallers, knocking more than four points off the FTSE-100, with traders citing profit-taking after recent gains, and caution over a report that several German banks had been asked to simulate a split of their investment banking operations.
Insurers were also weak, led by Standard Life, down 0.8 % as UBS downgraded it to sell from neutral in a UK life and general insurance review. UBS made the same downgrade on mid cap Phoenix Group, off 2.1%, citing valuation grounds for both.
Among weaker miners, Mexican silver miner Fresnillo was the biggest FTSE-100 percentage-faller, shedding 2.8% after a fourth-quarter production report, with some analysts citing concerns over a potential mining royalty in Mexico.
At the close, the FTSE-100 index was down 1.81 points, or 0.03% at 6179.17 points, retreating after having hit a fresh 2013 peak at 6184.02 in early trade.
News of a move by Credit Suisse to reduce its strategy allocation in UK equities also weighed on the London market.
"The FTSE-100 is a defensive market - and thus tends to underperform when economic lead indicators and global equity markets rise," Credit Suisse said in a global strategy review.
But the Swiss bank retained its "overweight" stance on the London market, seeing opportunities in real estate stocks and cheap international earners, such as Smiths Group and Shire. Smiths added 1.7%, Shire 0.8%.
Other stocks perceived as defensive provided the main underlying strength for the market, with drinks groups and food producers standing out.
Food ingredients group Tate Lyle gained 1.5% with traders citing the impact of an upgrade in rating to buy from hold by Berenberg Bank, which said the stock was the most undervalued in its sector.
Retailer Kingfisher was a good FTSE-100 gainer, up 1.5%, rallying after recent falls supported by a 9% price target hike by Exane BNP Paribas to 350 pence, in an upbeat review of UK retailers, with the bank forecasting new share buybacks by the DIY stores group.
Exane also upgraded its rating for clothing retailer Next, to neutral from underperform. Next added 1.5%.
Online grocer Ocado was the top FTSE-350 riser, up 6.3% on news Stuart Rose, one of Britain's best-known retail bosses, is to be chairman of the currently loss-making business.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereComments are closed on this article