Weakness in banks and drugmakers outweighed gains in commodity stocks and retailers, nudging Britain's top shares down by the close on Thursday. The FTSE 100 finished 0.3 percent or 12.43 points lower at 4,018.23, after adding 43.2 points, or 1.1 percent to 4,030.66 on Wednesday. The index is down 9.4 percent this year, but up 16.1 percent since its trough on March 9.
Trade was thin with just 86.6 percent of the volume of the last 90 trading days executed. "Markets are undecided, stocks recovered sharply after heavy losses (earlier this year) and then retreated again, but we now seem to be petering out into a bit of a nothing for this week," said James Hughes, market analyst at CMC Markets.
Banks were the heaviest drag on the index, with some of Wednesday's resilience fading after falls overnight by US peers as results from Morgan Stanley undermined the recent more upbeat trend. HSBC, Lloyds Banking Group and Standard Chartered lost 2.1 to 4.5 percent. Barclays outperformed, falling just 0.3 percent after the bank said its first quarter performance was well ahead of the same period last year, and it intends to resume paying dividends in the second half of 2009.
Among other financials, fund manager Schroders shed 2.6 percent after reporting a 54 percent drop in first-quarter pretax profit and saying the high level of market volatility continued to affect investor demand. Oil stocks added most points to the index, pushing higher as crude prices held around $49 per barrel.
BP, Royal Dutch Shell, Tullow Oil, and Cairn Energy added 1 to 2.7 percent. Miners were mixed, retreating from early gains on softer metal prices. Rio Tinto added 4 percent and BHP Billiton gained 1 percent but Kazakhmys, and Antofagasta fell. Lonmin was the top performing blue chip stock up 9.5 percent, after the platinum miner issued a reassuring production update.
Lonmin said platinum sales rose 30 percent in the second quarter and reaffirmed its 2009 guidance, prompting Cazenove to raise its rating to "in-line" from "underperform". Retailers built on Wednesday's advance, following solid results from mid-cap department-store group Debenhams whose shares leapt 21.7 percent.
The retailer saw its first-half pretax profit and sales beat market forecasts, and said trading had improved in the first weeks of its second half. Next, Marks & Spencer and Home Retail Group gained 3.3 to 6.6 percent. Testing equipment group Intertek gained 8.4 percent as bid talk returned to the group, with Switzerland's SGS seen as the possible predator.
Software firm Autonomy was also a strong gainer, up 6.9 percent after it beat first quarter expectations for pretax profit and posted a 23 percent rise in revenue. Falls by drugmakers also featured, with heavyweight GlaxoSmithKline losing 3.2 percent on further reflection of Wednesday's disappointing first quarter results while Astrazeneca fell 1.9 percent. Shire bucked the weak sector trend, rising 2.7 percent on vague bid speculation.
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