Britain's FTSE 100 share index ended down 0.4 percent on Wednesday as weakness in heavyweight oil stocks offset gains in miners, platinum specialist Johnson Matthey and caterer Compass Group. The FTSE 100 closed 18.56 points lower at 4,152.69 in a choppy session, after swinging from a high of 4,198.74 to a low of 4,050.67.
More than 1.1 billion shares changed hands, compared to Tuesday's 1.9 billion and last week's average of 1.4 billion. The UK benchmark had gained more than 10 percent in the previous two sessions but is still down more than 35 percent for the year on fears of a severe global recession. Oil shares were the top losers. BP, Royal Dutch Shell, Tullow Oil and Cairn Energy sagged between 0.8 and 5.8 percent.
Miners offered some support, with the FTSE 350 mining index gaining 5.4 percent. Kazakhmys, Antofagasta, Fresnillo, BHP Billiton and Vedanta Resources rose between 5.7 and 9.9 percent. Rio Tinto underperformed the sector, up 1.1 percent after BHP announced its decision on Tuesday to walk away from its hostile take-over bid for Rio.
"I don't see a great deal of upside in the short term. There are still pitfalls out there which could trip the market up and we could see a further move down on the FTSE 100 towards the 3,800 level," said Tim Whitehead, head of portfolio services at Redmayne-Bentley. US markets are closed on Thursday for the Thanksgiving holiday.
Platinum specialist Johnson Matthey soared 15.2 percent to top the FTSE 100 gainers' list after it posted a 20 percent rise in first-half profit and forecast full-year earnings per share growth of 1-5 percent, in line with market forecasts.
Compass Group was another top performer, adding 9.3 percent after the world's biggest caterer posted a 30 percent increase in annual profit, meeting expectations, and said trading in the new financial year had started well. Banks were mixed, with HBOS losing 6.7 percent, Standard Chartered dropping 6.6 percent and Barclays shedding 4.2 percent while HSBC advanced 2.1 percent.
British finance minister Alistair Darling said the government was prepared to take further action to ensure banks lend more and that it was right to have the appropriate monetary policy to help support the economy, which shrank at its fastest rate since 1990 in the third quarter of this year. Water company United Utilities sank 4 percent after it cut its dividend payment by 30 percent, despite reporting a 6 percent rise in its first-half underlying profit. Severn Trent slipped 5.6 percent.
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