Commodities lead FTSE fall

Britain's top shares fell on Monday as mining and energy stocks tracked lower commodity prices, while financials eased on Basel III and sovereign debt concerns. Rolls-Royce rose 2.7 percent after the engine-maker announced progress in understanding the cause of the failure of a Trent 900-powered A380 Qantas flight on November 4, adding the incident was specific to that type of engine.
Rolls-Royce rallies on Trent 900 engine clarity The incident has rattled a global aviation industry recovering from heavy losses during the downturn, and has been damaging for Rolls-Royce, its shares having dropped nearly 10 percent. The FTSE 100 closed down 25.39 points, or 0.4 percent, at 5,849.96. It hit a 29-month closing high on Friday after investors cheered the US Federal Reserve's commitment on Wednesday to boosting growth. "Trading has been pretty listless in light volumes, as the market consolidates after the sugar rush of Fed induced volatility of recent days," Jimmy Yates, head of equities at CMC Markets said.
Commodity-linked assets traded lower as an unwinding of dollar short positions that began after solid US jobs data on Friday gathered pace. Xstrata and Anglo American, down 1.4 percent and 2.4 percent respectively, were also hit by uncertainty over a strike by workers at the world's third biggest copper mine.
African Barrick Gold shed 1.9 percent after Goldman Sachs cut rating and earnings estimates. Energy stocks declined in tandem with a fall in the crude price. Tullow Oil dropped 2 percent as Goldman Sachs cut its rating to "neutral" from "buy".
Scottish & Southern Energy fell 1.6 percent after Nomura cut its rating on the utility to "reduce" from "neutral". Financials were struggling with traders citing criticism over the Basel III agreement, ahead of the G20 summit in Seoul on November 11-12, and resurgent eurozone sovereign debt woes weighing on stocks. Banks were lower, led by state-backed Royal Bank of Scotland which shed 3 percent.
Investors will watch for the Bank of England quarterly inflation report on Wednesday and Governor Mervyn King's news conference for any indication on the central bank's own quantitative easing programme. On the second tier, Irish Life & Permanent tumbled 17 percent after KBW downgraded its rating Sticking with mid-caps, Gartmore slid 15 percent after star manager Roger Guy became the latest key figure to leave the fund manager, prompting Numis to place its rating under review.
Serco fell 2.3 percent as S&P Equity Research began its coverage of the outsourcing firm with a "sell" rating. On the upside, satellite operator Inmarsat rose 3 percent after beating third-quarter earnings expectations. Invensys gained 2.2 percent as Credit Suisse joined a crop of brokers who have recently raised their target prices on the engineering group.