Britain's top share index drifted lower on Thursday, weighed down by energy and bank stocks, consolidating below the psychologically important 5,000 level. The FTSE 100 index closed down 16.62 points, or 0.3 percent to 4,987.68, having closed above 5,000 for the first time since late September 2008 on Wednesday.
"We're taking a bit of a pause from what has been a pretty steady, momentum driven, corporate news driven market over the past short while, so I don't think we're looking at anything at this stage that's terribly serious," said Mike Lenhoff, chief strategist at Brewin Dolphin.
The FTSE 100 has risen about 44 percent since hitting a six-year trough in March, though is still down almost 8 percent from its level in mid-September 2008 before the collapse of Lehman Brothers. Energy stocks took the most points off the index, retracing sharp gains made the previous session. Heavyweights BP and Royal Dutch Shell were off 1.2 percent and 0.6 percent, respectively.
With banks, it was a similar story, with the sector under pressure after Wednesday's strong rally. HSBC, Royal Bank of Scotland and Lloyds Banking Group shed 1-1.9 percent. Food and general retailers were also out of favour, with traders citing profit-taking after the sectors' recent gains. The FTSE 350 general retailers index has risen more than 62 percent so far this year, compared with a 15.6 percent rise for the FTSE 350 index.
Home Retail was the heaviest FTSE 100 faller, off 6.7 percent. Britain's biggest household goods retailer reported better-than-expected second-quarter sales at both its Argos and Homebase businesses. Next, down 4.1 percent, and Kingfisher, off 4 percent, were the second and third biggest blue chip fallers. Wm Morrison Supermarkets eased 0.3 percent as the food retailer said it sees slower market growth in the second half with first-half profits up 22 percent.
J Sainsbury fell 1.3 percent and Tesco dropped 0.8 percent. Thomas Cook topped the FTSE 100 leaderboard, up 4.6 percent, as creditor banks of insolvent German retailer Arcandor completed the placing of a 43.9 percent stake in the travel firm in one of the biggest share placings in Britain in recent years.
The consortium of banks, which included BayernLB, Royal Bank of Scotland and Commerzbank, placed 376.63 million ordinary shares in Thomas Cook at a price of 240 pence each, a small discount to Wednesday's closing price of 245 pence. Fellow tour operator TUI Travel rose 4.2 percent, benefiting from the strong demand for Thomas Cook stock. The Bank of England left interest rates at a record low of 0.5 percent for the sixth month running and said it would keep its 175 billion pound asset buying programme in place.
House prices in Britain rose 0.8 percent in August, leaving prices down 10.1 percent in the three months to August versus a year ago, mortgage lender Halifax said. British construction orders rose 2 percent in the three months to July against the previous three months, and were down 10 percent compared to a year ago, data showed.