FTSE loses ground

London's FTSE 100 Index pulled back from its six week high today as banks and commodity stocks weighed on the market.

FTSE loses ground

London's FTSE 100 Index pulled back from its six-week high today as banks and commodity stocks weighed on the market.

Figures suggesting the UK services sector grew at its fastest pace in more than a year in March reignited concerns of an imminent interest rate hike, which saw the Footsie dip further into negative territory, down 26.1 points to 5990.9.

Banking giant Barclays was under pressure amid worries over its performance this year after a Financial Times report suggested the bank expected a key measure of its earnings to decline in 2011.

The group, which is said to be looking to increase its risk appetite to hit profitability targets, saw shares fall 2% or 5.2p to 283.1p.

Other bank shares were also in the red after Moody's downgraded Portugal's debt rating for the second time in less than a month, fuelling fears over the exposure of UK lenders on the Iberian peninsula,

The agency warned the debt-laden country may suffer a further cut as it battles to avoid joining Greece and Ireland in seeking a financial rescue package.

Lloyds Banking Group fell 0.8p to 59.5p and Royal Bank of Scotland was 0.3p lower at 41.5p.

Oil prices remained over 120 US dollars a barrel after hitting a fresh all-time high overnight in sterling terms following supply pressures across Africa and the Middle East.

And in currency news, the pound strengthened across the board after the latest Markit/CIPS survey from the services sector showed activity surged to a 13-month high in March.

Among stocks, notable risers included Argos and Homebase owner Home Retail Group in the FTSE 250 as it cheered on speculation its recent profit warning had put it in the takeover spotlight.

The group, which is regularly said to be a potential target for Asda owner Wal-Mart, is now thought to be in the sights of US private equity firm Madison Dearborn Partners.

Home Retail shares lifted 2% or 4.7p to 209.3p.

But there was more gloomy news from elsewhere in the retail sector after another profits warning from embattled music chain HMV - its third this year.

Shares dropped another 8% or 1.3p to 14p, even though the group said lenders had agreed to put back financial tests from the end of April to the beginning of July.

It is also thought bidders for its Waterstone's books chain are being put under pressure to make an offer, with Russian oligarch Alexander Mamut said to have been given just over a fortnight to agree a deal.

More in this section

The Business Hub

News and analysis on business, money and jobs from Munster and beyond by our expert team of business writers.

Sign up
Puzzles logo

Puzzles hub

Visit our brain gym where you will find simple and cryptic crosswords, sudoku puzzles and much more. Updated at midnight every day.

News Wrap

A lunchtime summary of content highlights on the Irish Examiner website. Delivered at 1pm each day.

Sign up

Our Covid-free newsletter brings together some of the best bits from irishexaminer.com, as chosen by our editor, direct to your inbox every Monday.

Sign up