Mining stocks limited the London market’s progress today after a surprise decision by China to raise interest rates.
Despite major gains by oil giant Shell after it unveiled plans to scrap its historic twin-board structure, this was not enough to lift the FTSE 100 Index far into the black.
The Footsie ended the session 12.7 higher at 4642.8, after making gains of more than 30 points earlier on.
And there was little inspiration from New York, where the Dow Jones Industrial Average was 12 points lower by closing time in London.
Analysts said the rate hike in China caused anxiety among investors in mining companies, amid fears of less demand for raw materials.
Paul Webb, a trader at deal4free.com, said: “Essentially this could mark the beginning of a slow-down in China’s rampant growth, with fewer large construction projects being initiated, in turn putting downside pressure onto the commodity and mining sector.”
Mining stocks were the heaviest fallers, with Xstrata off 59p to 839p, Antofagasta losing 45p to 999p, BHP Billiton weakening 21.5p to 558p, Anglo American falling 36p to 1203p and Rio Tinto off 41p to 1423p.
Xstrata’s losses were deepened by speculation it could come back with a higher offer for Australian miner WMC after an earlier bid was rejected.
Shell’s stock lifted 11.75p to 435.5p after it revealed the outcome of its review of its corporate structure and said net income more than doubled in the third quarter.
But enthusiasm was tempered by news that the group may downgrade its reserves for the fifth time since January.
British Airways was another major climber after an upbeat broker note – its stock rose nearly 4% or 8p to 214.5p.
But other losers included ICI, which dropped 5.25p to 211.5p despite unveiling an 11% rise in third-quarter profits and saying its sales outlook was positive.
Retailer Boots saw its shares drop 8p to 663p after revealing that the cost of implementing its radical modernisation plan had driven half-year operating profits down by 24%.
Pubs, hotels and leisure group Whitbread also dropped 20.5p to 810.5p after announcing an £800 million programme of asset disposals and saying it plans to quit its London head office.
Pharmaceuticals group GlaxoSmithKline retreated 3p to 1148p after revealing it has lost £1.2 billion in sales so far this year as a result of generic competition for two anti-depressant drugs.
Elsewhere, outdoor equipment retailer Blacks Leisure picked up the pace after reporting a 17% hike in first-half profits and revealing a former boss of optician Dolland & Aitchison is to take over at the helm. Shares rose 8p to 440.5p.
Airports operator TBI gained 0.75p to 72.25p, after moving to buy the remaining 28% stake in Luton airport that it does not already own.
The biggest risers in the Footsie today were Amvescap up 23.25p to 298.75p, British Airways rising 8p to 214.5p, Shell up 11.75p to 435.5p and Unilever rising 11.75p to 464p.
The heaviest fallers were Xstrata down 59p to 839p, Antofagasta off 45p to 999p, BHP Billiton down 21.5p to 558p and Anglo American off 36p to 1203p.