FTSE 100 close: RBS leads risers
The Footsie fell well into the red this afternoon as miners and insurers buckled.
Traders: Eyes will be on news from the US.
The FTSE 100 index closed 27.4 points down at 4,252.6, a conclusion to the day that could have been worse had not Wall Street opened on the up. The Dow Jones was 146.5 points ahead at 8,446.4 at the London close.
As for the Footsie's current doldrums, analysts suspect second-quarter earnings news is need for the market to find direction. Better-than-expected first-quarter earnings, particularly from banks, were behind the sharp recovery in March and April.
'Investors are assessing what shape the recovery is likely to be and they are looking for tangible proof that positive, forward looking indicators will come to fruition,' Henk Potts, strategist at Barclays Wealth told Reuters.
'Investors will look to second-quarter earnings to see if they will be as supportive as the first.'
Attention today was again focused on the mining sector after commodity prices came under fresh pressure, leaving Rio Tinto 51p lower at 2,080p and BHP Billiton off 30p at 1,365p.
Xstrata's early gains were cancelled out by the day end - closing 5.6p down at 669.2p after it put more pressure on its takeover target Anglo American to come to the negotiating table.
Aviva Investors has said that it fully supports Anglo American's rejection of Xstrata's merger proposal, as it sees little financial or strategic merit for the deal and remains supportive of the current management team.
Insurers were also heading south after Prudential fell 10.5p to 406.25p, Aviva dropped 6.75p to 327.25p and Friends Provident declined 0.7p to 66.2p.
Other heavyweights under pressure included Vodafone, which dropped 1.55p to 117.1p and GlaxoSmithKline after a fall of 26.5p to 1080.5p.
Royal Bank of Scotland shares topped the Footsie leaderboard after Cazenove hiked its rating on the stock to 'outperform' from 'in-line' on recovery hopes. The shares rose 1.19p to 36.75p as the broker said a share price of 60p is achievable.
The rest of the sector struggled for direction with HSBC down 12.65p at 505.5p and Lloyds Banking Group off 1.07p at 66.5p. Standard Chartered fell 28p to 1167p after it reported strong trading in the first five months of the year but said it remained cautious about prospects.
The biggest corporate news of the session came from DSG International after the PC World owner reported losses of £140m. However, investors were encouraged by recent signs of trading stability, leaving shares 0.75p higher at 24.5p in early trading. They later closed unmoved at 23.75p.
Directories firm Yell set the pace in the FTSE 250 index as shares in the debt-laden group continued to recover after their battering earlier in the week. The stock was 0.75p higher at 28.25p.
Shares in Misys fell 2.25p to 169.5p after reporting a 40% rise in revenues that Evolution Securities says is 'slightly behind' its estimates.
'The end-markets are clearly tough, and beating margins while cashflow is poor, cost capitalisation is high and exceptionals continue, is not meaningful,' says Evolution Securities, which keeps its 'sell' rating.
Meanwhile, the UK's leading producer of recycled paper and corrugated packaging survived an 85% fall in profits as shares closed unmoved at 23.75p. DS Smith - which has seen a fall-off in demand for all its products - told investors that the timing of any recovery remained uncertain.
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