Britain's top share index fell in choppy trade on Friday as poor manufacturing data from China and the UK economy worried investors wading through a raft of corporate updates. UK bluechips fell 32.80 points, or 0.5 percent, to 6,328.01, with dealers citing stiff support to further losses around 6,300.
---- Lloyds leads banks down on mis-selling hit
Investors sold out of riskier mining stocks after data overnight showed growth in Asia cooling. They lost further ground as a slump in factory activity and a slide in mortgage lending added to evidence Britain may be falling into a new recession. "Overnight data has put China back in play and attracted some attention from the bears ... but I think the UK figures were the real surprise and that maybe supports the recent poor GDP data," Mike van Dulken, head of research at Accendo Markets, said.
Kazakh-focussed Kazakhmys fell 6.1 percent as investment banks began cutting recommendations and estimates a day after its profits were hit by worries over rising costs. Another miner, Xstrata, shed 3.8 percent after commodities trader Glencore pushed back the date for completion of the pair's tie-up for the third time. Glencore itself was down 3.6 percent.
Banks were led lower by Lloyds Banking Group, off 7.1 percent, after news of a new $2.3 billion insurance mis-selling hit. That helped spur another 4.9 percent loss for fellow part-nationalised lender the Royal Bank of Scotland which said on Thursday it was bowing to political and regulatory pressure to shrink its riskier investment banking arm.
There was further pressure on Lloyds' shares with analysts noting fresh media speculation that the UK Government, a 39 percent shareholder, may commence its share disposal at 61 pence. "This is a new 'contrived' break-even number for UK Government accounting which conveniently ignores its average in-price (cost of those shares) of 73.6 pence," broker Investec said in a note.
"All very interesting, but we hardly see the potential market overhang as positive for upside (in Lloyds' shares)." There were, however, some more upbeat results from the financials, with Anglo-South African insurer Old Mutual firming 1.3 percent after it unveiled a higher-than-expected profit. Retail landlord Hammerson rose 1.9 percent after reporting it had a better 2012 than rival Intu Properties, due to wealthy tourists hunting for bargains at its designer outlet villages and its stronger development pipeline.
WPP, the world's largest advertising firm, and often seen as a barometer for the state of the economy, recovered from third-quarter weakness as it said it saw business confidence improving. "I think investors are starting to look more and more at these types of forward looking sentiment indicators and taking in their stride the backward looking economic data, which is preventing the market from a sharper correction," a London-based trader said.
And with business confidence improving M&A is on the rise as corporations feel more comfortable splashing their cash rather than shoring up balance sheets. Expanding William Hill rallied 7.4 percent after taking full control of its online business, buying out the 29 percent stake in William Hill Online held by software company Playtech. And Hikma Pharmaceuticals rose 5.1 percent after receiving several unsolicited expressions of interest.