Britain’s FTSE dragged down by banks, miners

By Tricia Wright

LONDON (BestGrowthStock) – Britain’s top share index fell on Wednesday, led down by banks on nagging concerns about the health of European banks, while worries over Australia’s tax plan continued to dog mining stocks.

But UK real estate firms were among the top blue-chip risers after Barclays Capital issued a positive sector outlook and mortgage lender Halifax posted a surprise uptick in August house prices.

British Land (BLND.L: ) and Land Securities (LAND.L: ) both climbed 0.8 percent, while Hammerson (HMSO.L: ) rose 0.7 percent.

By 0807 GMT, the FTSE 100 (.FTSE: ) was down 38.14 points, or 0.7 percent, at 5,369.68, after breaking a seven-session winning streak to close down 0.6 percent on Tuesday at 5,407.82.

“This week is one which is devoid primarily of data. Markets aren’t going to do very much I don’t think,” Peter Dixon, UK economist at Commerzbank, said.

“Unless there’s any real news driving (the market), it’s just one of those times when investors probably take a little bit of profit,” he said.

Banks (.FTNMX8350: ) took the most points off the index following Tuesday’s fall after the Wall Street Journal reported major lenders understated holdings in potentially risky government debt during tests designed to probe banks’ strength.

Barclays (BARC.L: ) was the worst off, down 2.6 percent, also hurt by a downgrade from Bernstein to “market-perform” from “outperform.”

Miners (.FTNMX1770: ) were also out of favor, extending their declines from the previous session after Australia’s Labor party won the right to form a minority government, meaning a mining tax was more likely.

Eurasian Natural Resources (ENRC.L: ) was the biggest faller in the sector, down 1.9 percent, while BHP Billiton (BLT.L: ) shed 1.7 percent after going ex-dividend and Rio Tinto (RIO.L: ) dropped 1.4 percent.

Representatives of Rio Tinto have come to Russia to visit potash producer Uralki (URKA.MM: ) which is seen as a potential acquisition target for the mining giant, Vedomosti reported on Wednesday.

G4S (GFS.L: ), Shire (SHP.L: ), Diageo (DGE.L: ), Kazakhmys (KAZ.L: ), Segro (SGRO.L: ) and Rexam (REX.L: ) also fell after going ex-dividend.

Investors will await the release of UK industrial output data at 0830 GMT, with a month-on-month rise of 0.3 percent and a year-on-year rise of 1.9 percent forecast in a Reuters poll.

Also at 0830 GMT, fresh UK manufacturing data is forecast to show a rise of 0.3 percent on the month and 4.9 percent on the year, according to a Reuters poll.

The Bank of England’s Monetary Policy Committee is set to meet on Wednesday.

After the London close, all eyes will be on the 1800 GMT Federal Reserve release of its latest Beige Book survey of U.S. economic conditions.

(Editing by Hans Peters)

Britain’s FTSE dragged down by banks, miners