FTSE inches up

The FTSE 100 Index edged higher today as traders sat on the sidelines ahead of an expected interest rate hike in China this weekend.

The FTSE 100 Index fluctuated throughout the session as trading volumes remained low but managed to close 4.9 points ahead at 5812.95.

Encouraging economic signs in US failed to inspire investors, despite data revealing the trade deficit falling to its lowest level in nine months in October.

The rate of inflation in China is expected to lift to well above 4.5% this weekend, making an increase in interest rates likely, just a month after the central bank's last rate hike.

Tightening monetary policy could hit Chinese demand for overseas goods - which has been one of the drivers of the global economic recovery.

The pound was up against the euro at 1.19 and the dollar at 1.58 after producer prices output data came in just below 4% for November, indicating that inflationary pressures still remain a factor in the UK.

Tough new rules approved by European regulators clamping down on banker bonuses were also in sharp focus and led to a drop in banking stocks.

Barclays fell 3.8p to 272.2p and part-nationalised Royal Bank of Scotland dropped 0.6p to 41.7p.

Asian-focused bank Standard Chartered also continued its descent after falls yesterday on concerns over issues flagged up in its trading update.

Investors were left unsettled by its admission that costs were rising faster than revenues, with share falls compounded today after broker Bank of America Merrill Lynch lowered its rating on the bank.

Shares in the group fell 47.5p to 1762.5p.

BP was among a number of commodity firms seeing falls, down 0.4p to 455p.

Primark parent Associated British Foods dropped 14p to 1091p after giving a cautious outlook for the consumer environment in a trading update, despite confirming aims for annual revenue and profit growth.

Rolls-Royce was another faller after a report in the Financial Times suggested the group could face costs of $500m (€378.05m) in redesigns and fall out from its recent Trent 900 engine crisis.

The firm's shares pulled back from hefty early session declines, but still stood down 3p at 639p.

In the FTSE 250, Rentokil Initial was in the spotlight after it said woes continued at its troubled City Link delivery arm and confirmed the division's boss Stuart Godman had stepped down.

Its shares fell in early trade, but later clawed back to stand 1.9p higher at 96.9p.

The biggest Footsie risers were Vedanta Resources up 70p at 2275p, Cobham ahead 5.9p at 209.5p, Eurasian Natural Resources up 27p at 965p and Autonomy ahead 32p at 1377p.

The biggest Footsie fallers were Standard Chartered down 47.5p at 1762.5p, Burberry off 29p at 1108p, Intertek down 49p at 1885p, and BG Group off 30.5p at 1303p.