The FTSE 100 Index ended a lacklustre week with more losses today as US markets turned lower.
After a bright start to the session, the FTSE followed Wall Street down and closed 11.6 points lower at 4241 amid signs of caution from US consumers.
Official figures showed the saving rate among consumers hit a 15-year high in May. Analysts expect it to rise further still, which is likely to hinder a recovery from recession.
David Fineberg, head of trading at CMC Markets, said: “With the heightened anxiety we’re seeing amongst traders right now, risks still remain on the downside.”
In London, miners were again out of favour during a difficult week, with Eurasian Natural Resources down 2% or 13p at 652p and Randgold Resources off 49p at 4066p.
The exception proved to be Xstrata, which rose 16.8p to 686p at the end of a week that saw it make an unsuccessful attempt to merge with Anglo American.
Insurers were under pressure for a second successive session as Legal & General fell 1p to 56p and Prudential slipped 7p to 399.25p.
British Airways shares have also suffered turbulence, but rallied 2.7p to 128.3p after it emerged yesterday that 7,000 staff had agreed to a voluntary pay cut, potentially saving the company £10m (€11.7m).
Other risers included retailer Marks & Spencer, which rose 9p to 312p ahead of a first quarter trading update from the company next week.
The banking sector was lifted by a financial stability report from the Bank of England indicating that banks were in a better state than six month ago, although still vulnerable to further shocks. Royal Bank of Scotland jumped 1.4p to 38.1p and HSBC added 4.5p to 510p
Meanwhile, shares in broadcaster BSkyB slid after further signs from the communications regulator that it intended to force the company to sell its sports and movies content to rivals at regulated prices.
BSkyB vowed to use all available legal channels to challenge Ofcom, which believes the broadcaster has “an incentive to restrict the distribution of premium channels”. BSkyB was 2.25p down at 449.5p.