Banks pull FTSE down, precious metals miners rise

* FTSE falls 0.2 percent in holiday-thinned volume

* Miners shrug off China rate hike, precious metals gain

* Smith and Nephew weighed on by FDA announcement

By David Brett

LONDON, Dec 29 (BestGrowthStock) – Britain’s top shares fell in
midsession trade on Wednesday, weighed down by weakness in banks
which offset a turnaround in mining stocks as investors shrugged
off a rate hike in China.

By 1141 GMT, the FTSE 100 (.FTSE: ) was down 14.20 points or
0.2 percent at 5,994.72, having closed at a fresh 30-month high
on Friday and above 6,000 for the first time since June 3, 2008.

“There is very little that can be interpreted from today’s
session in truth,” Joshua Raymond, market strategist at City
Index, said.
“Strength in miners is helping to counter balance weakness
in banking stocks … The rate hike by China was of no real
surprise to the market and there is every chance that China
could announce another two to three hikes in 2011 as part of
their new prudent monetary stance to curb spiralling inflation.”

Miners looked set to end 2010 on a strong note, continuing
a stellar run enjoyed over the last two years, with precious
metals operators African Barrick Gold (ABGL.L: ) and Randgold
Resources (RRS.L: ) rising 3.5 percent and 2.9 percent
respectively, lifted by higher gold prices.

Miners (.FTNMX1770: ) have gained 29 percent so far this
year, compared with a 10.8 percent gain for the FTSE 100, and
rose 108 percent in 2009, bouncing from a 56 percent drop in
2008.

Banks (.FTNMX8350: ) weighed on London’s blue chips, blighted
by lingering concerns over Europe’s debt problems.

Elsewhere, Smith & Nephew (SN.L: ) shed 2 percent after news
on Tuesday that the U.S. Food and Drug Administration warned the
British orthopaedic device maker that it failed to establish
adequate manufacturing validation procedures for a hip
replacement device. [ID:nN28251395]

“It’s all about sentiment rather than any big problem,” a
trader said. “You’ve also got to bear in mind that S&N shares
have had a good run recently on vague takeover speculation, so
investors only need a small excuse to bail.”

Alliance Trust (ATST.L: ), BT Group (BT.L: ), Burberry Group
(BRBY.L: ) and Experian (EXPN.L: ) took 1.08 points off the FTSE 100
index after losing their payout attractions.

There was no domestic data due for release on Wednesday,
while in the United States, the latest weekly U.S. mortgage and
refinancing index is due at 1200 GMT.

The FTSE remains on course for its strongest December since
1987 when it rose 8.5 percent. It is up 8.4 percent so far this
month, albeit in wafer-thin volume.

“The FTSE continued to crawl near the psychological 6,000
level without much fanfare,” said Enis Mehmet at Autochartist.

“Traders seem to be content with the market at this level,
feeling neither too bullish nor bearish … This could be a sign
that traders are becoming concerned about the strength and
direction of this index.”
(Editing by David Holmes)

Banks pull FTSE down, precious metals miners rise