Weak miners, banks drag FTSE down, supermarkets up

* FTSE 100 index sheds 0.9 percent

* Supermarkets gain on broker comment

* Miners retreat after recent gains, BHP Billiton figures

By Simon Falush

LONDON, April 21 (BestGrowthStock) – Retreating banks and commodity stocks dragged
Britain’s top share index lower by midday on Wednesday, though food retailers,
Tesco (TSCO.L: ) and Wm Morrison (MRW.L: ) gained ground, supported by positive
broker comment.

By 1036 GMT, the FTSE 100 index (.FTSE: ) was 49.99 points, or 0.9 percent,
lower at 5,733.70, having rallied 1 percent on Tuesday.

Miners were the main drag on the index as sentiment on the sector was
knocked after BHP Billiton (BLT.L: ) reported lower quarterly production across
metals and coal, with copper particularly hard hit and iron ore lagging that of
rival Rio Tinto (RIO.L: ). [ID:nSGE63K01R]

BHP Billiton fell 2.3 percent while Rio Tinto, Lonmin (LMI.L: ), Anglo
American (AAL.L: ), and Kazakhmys (KAZ.L: ) fell 1 to 2.3 percent.

“There’s a sell off in miners as the BHP figures dampened sentiment and
there is uncertainty about the growth outlook as there are worries about
emerging market demand,” said Josh Raymond, market strategist at City Index.

Banks also retreated, with the International Monetary Fund (IMF) threat of
new taxes to cover the cost of any bailouts adding to jitters on the sector,
while action by the U.S. and British regulators against Goldman Sachs also
dimmed sentiment.

“The IMF campaign and the action taken by the SEC (Securities and Exchange
Commission) and the FSA (Financial Services Authority) against Goldman is adding
to a degree of uncertainty, so that anyone who is buying banks is doing so on a
short term basis,” Raymond said.

Barclays (BARC.L: ), Royal Bank of Scotland (RBS.L: ) Standard Chartered
(STAN.L: ) and HSBC (HSBA.L: ) fell 0.3 to 1.5 percent.

SUPERMARKET STRENGTH

Food retailers were the only significant positive for the index, in demand
as Goldman Sachs upgraded the European sector to “neutral” from “cautious”.

Wm Morrison Supermarkets (MRW.L: ) gained 1.2 percent, as Goldman upped its
rating to “buy”, while Tesco (TSCO.L: ) added 1.4 percent, rallying after earnings
news on Tuesday disappointed, as Societe Generale lifted its rating to “hold”
from “sell”.

Chip designer ARM (ARM.L: ) was the biggest blue chip gainer, up 3.5 percent,
finding support after strong results from Apple (AAPL.O: ) boosted the sector.

Traders also said news reports that Apple could be interested in making a
bid for ARM was also lifting the stock.

In economic news, the number of Britons claiming unemployment benefits fell
three times faster than expected in March.

But the rate of unemployment on the broader International Labour
Organization (ILO) measure rose to its highest in almost 14 years in the three
months to February, data from the UK Office of National Statistics showed on
Wednesday. [ID:nONS004943]

Minutes from the Bank of England’s Monetary Policy Committee showed members
voted unanimously to stick with their ultra-loose policy stance this month, but
some are growing more concerned about inflation.

Among individual losers, BSkyB (BSY.L: ) fell 1.1 percent after RBS downgraded
its rating on the pay-TV provider to “hold” from “buy”, saying that after faring
well in the recession, it sees near-term headwinds slowing growth.

Ex-dividend factors knocked 2.38 points off the FTSE 100 index, with Aggreko
(AGGK.L: ), BAE Systems (BAES.L: ), Kazakhmys (KAZ.L: ), Petrofac (PFC.L: ), Smith &
Nephew (SN.L: ) and Xstrata (XTA.L: ) all losing their payout attractions.

Investing

(Editing by Sharon Lindores)

Weak miners, banks drag FTSE down, supermarkets up