Weaker mining stocks outweigh gains in Lloyds as Footsie slips back

FTSE: 5,808.89 (–55.76) Mid-250: 11,870.92 (–137.87) Small Cap: 3,274.58 (–10.98)MINING STOCKS, dented by heightened investor concerns about the strength of the global economic recovery, pushed Britain's top shares below a key technical level yesterday, a bearish signal for the index.

The FTSE 100 closed down 55.76 points, or 1 per cent, at 5,808.89.

US Federal Reserve chairman Ben Bernanke sent a strong signal on Tuesday that no new stimulus measures were on the cards, despite a recent run of gloomy data from the world’s biggest economy.

Sentiment was further dampened by a threat to Britain’s top-notch sovereign credit rating by ratings agency Moody’s.

“I think a few people were hoping, considering Bernanke rarely disappoints the market, that he would be fairly reactive [to last week’s poor US jobs data] but we didn’t get that last night,” Joshua Raymond, market strategist at City Index, said.

Risk-sensitive mining stocks knocked the most points off the FTSE 100 index, falling in tandem with metals prices.

Chilean miner Antofagasta led the market lower, off 5 per cent, after it said the ramp-up of its Esperanza copper mine would be completed in the second half of the year, having taken longer than initially planned.

Integrated oil stocks pared earlier losses, with Royal Dutch Shell up 0.1 per cent, as crude rose $1.77 to $100.86 after Opec failed to reach a deal to increase output, triggering fears over supply later this year.

Banks were stronger after Britain’s treasury said they would be allowed to reduce their use of its credit guarantee scheme, a move which finance minister George Osborne said indicated the sector “is clearly on the mend”.

Lloyds Banking was the star blue-chip performer, up 2.3 per cent, after the bank sold its truck leasing company Hill Hire to American group Ryder System for £151 million.

Barclays firmed 0.2 per cent, although weakness was seen elsewhere in the sector.

Royal Bank of Scotland shed 0.1 per cent, while HSBC and Standard Chartered both fell 1.1 per cent.

British pubs group Punch Taverns added 6.8 per cent after it reported a sharp rise in sales at its Spirit managed division and said it was on track to complete a demerger by the end of the summer. – (Reuters)