FTSE declines in morning trading

Mining firms dragged the FTSE 100 Index into the red today despite profits cheer from part-nationalised Lloyds Banking Group.

Mining firms dragged the FTSE 100 Index into the red today despite profits cheer from part-nationalised Lloyds Banking Group.

A stronger dollar hit metal prices and hurt heavyweight commodity shares while Greece’s debt woes also cast a shadow over the wider London market.

The Footsie was 66.4 points lower at 5687.5 with fears over Chinese measures to cool its rampant economy also adding to the negative sentiment. Futures markets signalled early falls on Wall Street this afternoon.

In London, Lloyds’ return to profit for the first three months of the year gave an early boost to shares although it lost momentum as the session wore on.

The bank expects to report profits at both the half year and full-year stage, but the firm – which is 41% owned by the taxpayer – slipped 0.2p to 70p.

Oil giant BP was also among the fallers despite reporting first quarter profits more than double last year at US$5.6bn (€4.2bn).

The firm has been helped as the price of crude oil has increased due to recovery hopes for the global economy and market speculation.

However, the results have been overshadowed by the continuing oil spill from a BP well in the Gulf of Mexico and shares were more than 1% lower – down 9.4p to 617.4p.

Rival Royal Dutch Shell, which reports tomorrow, added 7p to 1920p after an upgrade from brokers at JPMorgan Cazenove.

The leading Footsie riser was Gauloise to Davidoff cigarettes firm Imperial Tobacco, which added 36p to 1983p after its £974m (€1.12bn) pre-tax profits surpassed City hopes.

Property firm Segro was also a gainer after a well received trading update helped shares edge 0.2p higher to 319.1p.

But blue-chip risers were outnumbered by a raft of fallers as commodity stocks led the index lower. Kazakhmys was the biggest Footsie casualty, losing 62p to 1418p.

Vedanta Resources and Xstrata shed 105p to 2690p and 42.5p to 1151p respectively.

Another heavyweight, Vodafone, was also under pressure after Dutch firm KPN kicked off the earnings season for major telecoms companies. Profits were up but sales are still under pressure, which saw the UK mobile giant’s own shares slide 3.4p to 144.9p.

In the second tier, home shopping firm N Brown rose 3% after posting a 12.6% hike in annual profits.

Shares added 9.8p to 262.2p despite the firm’s warning that 2010 will be “no less challenging”.

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