FTSE swap mining stocks for banking shares

The FTSE 100 Index was on the back foot today after investors switched out of heavily-weighted mining stocks and into banking shares.

A fall in copper prices lay behind the 2% drop for the mining sector and meant the FTSE 100 Index fell 15.9 points to 6165.7 by mid-morning.

Bank shares took the opportunity to stage a mini-recovery, with Lloyds TSB up almost 4% after broker BNP Paribas said it did not think the bank would need to raise additional capital. Lloyds was 14.75p higher at 406p, while Royal Bank of Scotland added 8p to 252.75p and Barclays rose 8.5p to 400.5p.

Cable & Wireless joined the banks on the risers board after brokers upgraded their forecasts in the wake of annual results yesterday.

The stock lifted 5.5p to 162.1p, a gain of 3%, as the City also eyed the possibility of a break up for the corporate telecoms provider.

Miners dominated the fallers board with BHP Billiton off 51p to 2059p and Rio Tinto down 181p to 6488p as fears over global demand impacted sentiment towards commodity-based stocks.

Other fallers included London Stock Exchange, which declined 19p to 1019p as investors worried for a second successive day about trading prospects in the face of increased competition and tougher trading conditions.

Meanwhile, retail shares were under pressure after John Lewis said department store sales declined for a second successive week. The drop of 1.8% put pressure on the likes of Next, which was off 12p at 1210p, and Marks & Spencer with a decline of 4.25p to 392.25p.

Supermarket group Sainsbury’s bucked the gloom with a shares rise of 7.5p to 352.25p.

On a quiet day for corporate news, Marston’s caught the eye in the FTSE 250 Index after resilient half-year results impressed analysts. Shares in the pubs and brewing company were 6.75p higher at 221.25p.