FTSE loses momentum

The London market’s recent rally ran out of steam by noon today despite further progress for resurgent UK banks and a decent session among miners.

The London market’s recent rally ran out of steam by noon today despite further progress for resurgent UK banks and a decent session among miners.

Commentators said profit-taking by investors after a strong run for world markets contributed to the fall in the FTSE 100 Index, which surrendered a positive opening to stand 23.7 points lower at 5341.9.

The prospect of more lenient regulatory reforms and the positive reception of markets to UBS results yesterday lifted most banks for a second session.

The biggest rise came from HSBC, which climbed 6.6p to 672.9p, while Barclays added 1.75p to 341.3p and Standard Chartered cheered 2p to 1901p.

In the mining sector, shares were higher after Asian stocks surged on optimism over the region’s two leading economies, Japan and China.

The latter’s central bank said it believed its economy was unlikely to suffer a “double dip” while the International Monetary Fund also said growth should be robust.

Xstrata set the pace in the FTSE 100 Index with a rise of 15.5p to 1047p, while Rio Tinto lifted 36p to 3392p.

Shares in British Gas owner Centrica were down by 2%, 6.9p to 300.8p, after it posted half-year results in line with market expectations.

Centrica lifted overall operating profits 65% to £1.56bn (€1.87bn) but the focus of households was on the 98% rise in British Gas profits to £585m after the company benefited from the coldest winter in 30 years.

Engineering firm Invensys provided the biggest fall – off 17.1p to 275.9p - even though it said it expected to deliver an improved performance in the year.

The stock, which has made strong gains in recent weeks on takeover speculation, succumbed to profit taking as shares fell 16.8p to 276.2p.

In the FTSE 250 Index, shares in directories firm Yell continued to struggle after the company warned revenues would suffer due to uncertainty over the pace of economic recovery. While its fall in first quarter revenues and earnings met City expectations, shares fell 13% or 4p to 26.2p.

EasyJet shares were also lower – down 27.7p to 406.8p – as it said temporary action to resolve “crewing issues” in some parts of its network would lift costs by up to 3% during the current financial year.

The airline is bringing in at least three extra planes and crew during the summer to minimise the impact on customers and staff, although some passengers could find flights rescheduled.

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