The FTSE 100 index lost ground today as investors took profits ahead of big economic numbers in the US tomorrow.
Top flight shares in London made it into positive territory early on, but fell back to close down 13.3 points at 4248.8.
Wall Street opened only slightly above its overnight level as US traders sat on the sidelines waiting for tomorrow’s non-farm payroll figures and jobless claims.
Despite the drop, the Footsie managed to keep its head well above the 4200 parapet as economic and corporate news sustained investors’ interest.
In a widely-predicted move, the Bank of England cheered borrowers and disappointed savers by keeping interest rates on hold.
The main corporate news of the day came from insurance giant Royal & Sun Alliance, which announced a £960 million rights issue and the outsourcing of 1,000 jobs.
Market watchers said R&SA shaved 1.5 points off the Footsie as its shares outstripped the other top flight fallers by far, losing nearly 13%, or 19.5p to 134.5p.
Rivals came out in sympathy, with Norwich Union owner Aviva dipping 6.75p at 522p, Prudential losing 8.25p at 471.75p and Legal & General 3.25p lower at 103.25p.
Banks also lost out, with HBOS down 5.5p to 724.5p, Abbey National down 3p to 545p and Alliance & Leicester falling 8.5p to 898p. Royal Bank of Scotland was the biggest loser in the retail banking sector, falling 35p to 1530p. However, traditional “big four” member Barclays bucked the trend, rising 4.5p to 472p and Bradford & Bingley was up 5p to 310.5p.
Transport operator Arriva drove 3.75p lower to 382p, despite reporting a rise in profits on the back of stronger performances from its rail and bus businesses.
And drinks group Diageo lost earlier gains as traders digested a cautious outlook issued with its full year results. Shares fell 10.5p to 669p.
Investors gave some tender loving care to medical and drugs groups, with Shire Pharmaceuticals adding 9p to 500p, Alliance UniChem up 9.5p to 538p, GlaxoSmithKline ahead 18p at 1267p, AstraZeneca up 26p at 2592p and Smith & Nephew advancing 4.25p to 414p.
Outside the top flight, Northern Foods headed the list of FTSE 250 fallers, losing 24p to 136p, after announcing the departure of its chief executive in the wake of a profits warning.
International Power, the energy generator poised to take over the UK’s biggest power station, was also off 9p at 137.25p after blaming weaker wholesale electricity power prices for denting profits in the first half.
But Eurotunnel rose 1.75p to 59.5p despite press reports that it could face a showdown with French trade unions over its plans to run freight trains on the continent.
The day’s biggest gainers were Amersham, up 12p at 550p, Tomkins ahead 5.75p at 278.75p, Shire Pharmaceuticals advancing 9p to 500p and Alliance UniChem rising 9.5p to 538p.
The largest losers were Royal & Sun Alliance, down 19.5p at 134.5p, Hanson off 19.25p at 417.5p, Sage Group 6.25p lower at 184p and Amvescap 18p lighter at 550.5p.