By Barbara Kollmeyer
MADRID (MarketWatch) -- The U.K. benchmark stock index closed
lower Friday, bringing a two-session winning streak to an end, as
mining firms weighed on the market.
The FTSE 100 index fell 16.49 points, or 0.3%, to close at
5,741.37.
The index rose 0.5% Thursday to end at 5,757.86, its highest
close since April 20. It's gained nearly 3.5% so far in
October.
Although a test of year-to-date highs on the FTSE remains a
possibility, traders appear to be "pausing for breath," said
Anthony Grech, head of research at IG Index.
"The big risk for the FTSE does, however, seem to be its
overweighting of the mining stocks, and with the fortunes of the
sector now clearly being dictated by monetary policy out of
Beijing, any further attempts to rein in Chinese economic growth
could have a very marked effect here in London," said Grech.
China lifted interest rates this week in a surprise move. Any
attempts to cool growth are largely viewed as negative for
resource-related stocks because of expectations that China would be
seeking fewer raw materials.
Investors are closely watching all data from China. Read about
how miners could be a risky bet.
The meeting of Group of 20 finance ministers and central bankers
under way in South Korea was also a factor Friday.
Miners stayed weak in London with gold volatile amid the G20
discussions. Copper went back and forth across the flat line, while
gold futures fell 90 cents to $1,325.30. Eurasian Natural Resources
fell 2.2%, Lonmin PLC lost 1.6% and Vedanta Resources PLC dropped
1.9%.
Oil stocks reversed earlier losses, as December crude futures
gained 41 cents to $80.97 a barrel. Shares of Essar Energy PLC rose
2.9%.
Banks also pushed higher, after spending much of the day in
negative territory, though that didn't help the main index much.
Royal Bank of Scotland Group PLC (RBS) rose 1.4%, and Lloyds
Banking Group PLC added 2.1%.
TUI Travel PLC was a top gainer, rising 3.2%, after suffering
heavy losses Thursday on news it will restate 2009 earnings and its
chief financial officer is stepping down.
Citigroup downgraded TUI Travel and Thomas Cook PLC to hold,
saying the tour operators face the dangers of low growth and
capacity risk. Shares of Thomas Cook fell 1.8%.
Shares of British Sky Broadcasting Group PLC edged up 0.6% after
the firm reported a 78% rise in profit for the fiscal first
quarter. Revenue for the group topped forecasts.
Meanwhile, online sports-betting group Betfair priced its
initial public offering at 1,300 pence Friday, with shares set to
begin officially trading Oct. 27. Its planned range was 1,100 to
1,400 pence.
Conditional trading began Friday, and David Buik, strategist at
BGC Partners, said prices pushed to around 1,539 pence.