FTSE lower as early rally loses steam

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Banks were among the biggest movers in both directions yesterday as the FTSE 100 gave up early gains to close 0.4 per cent lower.

David Madden, market analyst at IG, said: “Natural resource stocks initially propped up the FTSE but as the day went on dealers lost their appetite for risk.”

The FTSE 100 Index was down 28.29 points at 6,619.58. But with the latest survey pointing to vigorous growth in the dominant services sector, the more domestically-focused FTSE 250 was up 65.21 points at 15,197.18.

Results from HSBC disappointed the City despite a 10 per cent rise in first half profits. The figures also weighed on peer Standard Chartered, ahead of its results later this week. HSBC shares lost 33p, or more than 4 per cent, at 721.7p. Standard Chartered was 20.5p lower at 1,524p.

A downgrade from French bank Societe Generale weighed on Royal Bank of Scotland, down 5.1p at 317.4p. But Lloyds Banking Group was on the blue chip risers’ board, adding 2.7 per cent to 75.69p after weekend comments from chief executive Antonio Horta-Osorio that he aims to start paying out up to 70 per cent of the banks’ earnings in dividends.

Glasgow-based temporary power provider Aggreko was the biggest top flight riser as the shares recovered some ground following last week’s sell off, which was prompted by negative comments regarding some of its markets. The company’s stock was up 55p or 3.5 per cent at 1,642p.

In the second tier, holiday firm Thomas Cook was in favour following positive comment from two brokers. Shares climbed more than 5 per cent to 169.9p as Citigroup upped its rating to “buy” and Panmure Gordon speculated that the company may resume dividend payments as early as 2015.

NEW YORK: In early trade, US stocks pulled back 
from record levels, while the dollar fell against the yen as investors weighed the likelihood of when the Federal Reserve will pare back its economic stimulus programme.

The Dow Jones industrial average was down 58.07 points, at 15,600.29. The Standard & Poor’s 500 index was down 3.30 points at 1,706.37.