Britain's top share index ended 0.7 percent lower on Tuesday, dragged down by banks, which extended the previous session's losses, in thin trading ahead of the Easter break. The FTSE 100 index ended down 38.34 points at 5,672.32, having closed above the 5,700 level for the last three sessions. The index hit a 21-month intra-day peak at 5,742.75 earlier.
Banks took the most points off the index with heavyweight HSBC down 2.1 percent and Barclays off 2.4 percent. Part-nationalised banks Royal Bank of Scotland and Lloyds Banking Group shed 3.4 and 3 percent respectively, unsettled by uncertainty about what a British government might do with its stakes in the two following the impending general election, expected on May 6.
Midcap fund firm Gartmore slid more than 31 percent after the company suspended fund manager Guillaume Rambourg after an internal probe. On the economic front, Britain emerged from an 18-month recession in the fourth quarter of last year with more momentum than previously thought. The UK economy grew 0.4 percent in the last three months of 2009, above analysts expectations for an unrevised 0.3 percent.
"The GDP numbers are good for the economy as a whole ... but for equity markets, of course, if that means tightening, possibly you could see a little bit of a sell-off, and you could be seeing a little bit of profit taking today," said Angus Campbell, head of sales at Capital Spreads. Energy stocks were in the doldrums, tracking a fall in the crude price. BP, BG Group and Cairn Energy dropped 0.4 to 2.1 percent.
Drugmakers continued their recent downward trend, with Shire, GlaxoSmithKline and AstraZeneca down 0.6 to 2.2 percent. AstraZeneca and Abbott Laboratories said an experimental two-in-one heart drug has been knocked back by US regulators who want more information about the product. Miners were in negative territory, with Rio Tinto, Xstrata and Eurasian Natural Resources down 0.1 to 0.4 percent.
The sector had received a boost earlier in the session after BHP Billiton and Brazil's Vale said they had persuaded Japanese steel mills to buy iron ore based on a quarterly pricing system as of April 1. The move signals the demise of fixed-price annual contracts analysts said were costing miners billions of dollars in lost revenue.
Oil services company Amec added 3.2 percent after it acquired British consultancy Entec for an initial 61 million pounds, prompting Seymour Pierce to up its rating to 'outperform' from 'hold'. Mobile telecoms heavyweight Vodafone moved higher again, up 0.7 percent following recent press reports concerning possible dividends from its US wireless joint-venture with Verizon.
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