Weaker miners and energy stocks, weighed by falling commodity prices, outweighed gains in defensive tobacco firms and drugmakers to drag Britain's top share index down 0.3 percent by the close on Wednesday. The FTSE 100 index ended 18.29 points lower at 5,762.06. Volume was thin as many traders extended their Easter holidays, with just 74 percent of the average of the last 90 days transacted.
Miners were the biggest drag on blue chip sentiment as metal prices retreated, with the demand outlook clouded by festering worries on Greece's debt problems. BHP Billiton, Antofagasta, Rio Tinto, Anglo American, and Kazakhmys lost between 1.2 and 2.6 percent. Output in Britain's service sector fell during a snowy January at its fastest monthly pace since August, more than reversing the previous month's gain, official data showed. This dented the pound but left the equity market unaffected.
The Office for National Statistics said services output fell 0.7 percent on the month after a 0.6 percent rise in December. Year-on-year, output was down 1.1 percent in January, the same as in the previous month. "The (services) PMI data was disappointing, there are not many drivers to push the market higher and we are more likely to see bouts of consolidation the higher we go," said Josh Raymond, analyst at City Index.
A daily YouGov/Sun poll on Wednesday showed the gap between the opposition Conservative Party and the ruling Labour Party narrowed to 8 points. This would make the Conservatives the largest party in parliament, but without an overall majority. Oil majors were weaker as the crude price slipped back slightly after recent strong gains, with BP, Royal Dutch Shell, BG Group, Tullow Oil, and Cairn Energy down 0.4 to 3 percent. With a slight dimming of risk appetite, pharmaceuticals stocks and tobacco companies, which tend to outperform in a falling market, gained ground.
GlaxoSmithKline, AstraZeneca and Imperial Tobacco added 1.1 to 2.6 percent. Man Group was the top FTSE 100 gainer, jumping 6.1 percent after the hedge fund firm's flagship AHL fund saw a 3.81 percent rise in its weekly net asset value, and as Execution Noble started coverage on the stock with a "buy" rating.
Mobile telecoms heavyweight Vodafone was a drag on the FTSE 100, down 1.2 percent as hopes for a resolution of the future of its US joint venture with Verizon faded. Ex-dividend factors knocked 2.28 points off the index on Wednesday, with Prudential, British Land and Pearson all losing their dividend attractions. British Land also suffered after UBS cut its stance to "neutral" from "buy" in a review of the UK real estate sector.
Broker comment gave a lift to two blue chip retailers, with Next adding 2 percent after Citigroup upgraded its stance to "buy" from "hold", while Kingfisher firmed 2.8 percent after BofA Merrill Lynch hiked its target price.
Petrofac was the biggest faller on the index, down 4.1 percent following its demerger which created energy developments business Enquest which fell 3.6 percent. Investors will watch the Bank of England's rate decision on Thursday for more clues on the outlook for the UK economy ahead of an election that will be held on May 6.
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