Investors took money off the table today as the optimism behind last week’s 15-month high in the FTSE 100 Index ebbed away.
London shares ended the session 35.1 points off their opening mark at 4341.8 as cautious investors took profits after the recent gains.
A downbeat mood in New York fuelled the profit-taking, with the Federal Reserve’s doubts about the sustainability of recent growth weighing on minds.
At the time of London’s close, the Dow Jones Industrial Average stood nearly 50 points down.
The London markets had hovered around 15 points off their opening mark during the morning, but shed further ground in the afternoon as Wall Street built on Friday’s late losses.
In London, investors retreated as several mortgage lenders passed on last week’s rate rise to borrowers and economic data showed rising oil prices putting manufacturers under pressure.
Pharmaceuticals and colourings group Johnson Matthey was the day’s top performer after a broker lifted its price target on the group. Shares put on nearly 2%, or 16p, to 1020p.
Tobacco stocks showed some of the biggest gains after British American Tobacco named non-executive director Jan du Plessis as successor to outgoing chairman Martin Broughton.
British Airways said today that Mr Broughton will replace its retiring chairman Lord Marshall next year.
BAT’s rival Gallaher put on 2.5p at 603p, Imperial Tobacco moved 5.5p higher to 981p and BAT was up 2p at 708p.
Insurer Aviva finished the day third on the risers board, up 5.5p at 506.5p.
But other insurance and life companies suffered, with Prudential down 4p at 481.75p, Friends Provident losing 1.25p at 138p and Royal & Sun Alliance easing 0.25p to 89p.
Among the banks, Royal Bank of Scotland was the star, lifting 12p to 1561p. But Barclays fell 4p to 498.5p, HSBC declined 8.5p to 902.5p and Lloyds TSB dropped 5.25p to 408.75p.
Outside the top flight, British Airways took centre stage after announcing results for the first six months of its financial year.
Investors took the profits fall – down to £60 million from £310 million – in their stride, leaving the stock just 1.5p lower at 222.5p.
Elsewhere, convenience foods group Uniq failed to hold earlier gains as cautious comments from the company about the second half of the financial year offset a rise in half-year profits to £11.4 million from £10.1 million. Shares fell 2.5p to 207.5p.
And life assurer Britannic’s decision to close its retirement solutions arm to new business led to a 2.5p fall in shares to 266p.
Meanwhile, the latest on-pitch troubles at Leeds United took their toil on the embattled company’s share price, which fell 8%, or 0.25p, to 2.75p.
The day’s biggest risers were Johnson Matthey, up 16p at 1020p, Scottish Power ahead 5.25p at 363.75p, Aviva up 5.5p to 506.5p and GKN ahead 3p to 289.75p.
The biggest losers were 3i Group, down 25.75p to 616.25p, Schroders NV off 27.25p at 659.75p, Cable & Wireless down 5.25p at 129p and AstraZeneca 92p lighter at 2675p.