MArkets: Blue chips keep lid on their losses

The benchmark FTSE 100 index pulled back from earlier losses of more than 1 per cent to close down just 12.71 points, or 0.2 per cent, at 5,435.08.

Germany’s Dax ended the day down by a similar percentage, while France’s Cac-40 slipped by 0.6 per cent.

A steady start on Wall Street meant that the Footsie was still up more than 3 per cent over the shortened three-day week – its best weekly gain since the start of February.

Craig Erlam, market analyst at Alpari, said: “With the European Central Bank, Bank of England and Federal Reserve all deciding against further quantitative easing or rate cuts this week, it’s surprising that the markets have held up as well as they have.”

China’s first interest rate cut in four years, announced on Thursday, continued to unnerve some investors, though, who fretted that May trade and industrial data released over the weekend might be weaker than pessimistic forecasts, leading to hefty falls for miners.

Vedanta Resources was off 5 per cent, or 50p, at 935.5p, while Rio Tinto fell 146p to 2,869p.

Banks were also casualties of the weak sentiment, as Barclays dipped 2.5p to 190.4p, and Royal Bank of Scotland dropped 1.4p to 223p.

With investors seeking safer havens such as utilities, Severn Trent added 47p to 1,782p and Scottish Gas-owner Centrica rose 6.8p to 315.2p.

Housebuilder Bellway was 26.5p higher at 770.5p after it said demand in spring selling had been resilient with visitor levels and reservation rates continuing to beat hopes.

Meanwhile, on Wall Street US stocks advanced, led by defensive shares such as telecoms and healthcare as investors played things close to their chests before a weekend in which Spain is expected to request aid for its troubled banks.

The gains saw the broad-based S&P 500 up 0.8 per cent after a 2 per cent rise on Wednesday, closing its strongest week of the year so far.

The Dow Jones Industrial Average rose 93.24 points to close the session at 12,554. 20.