Traders hold off for rates news

LONDON'S leading share index shed 0.6 per cent yesterday, snapping a three-session winning streak with investors turning cautious ahead of today's Bank of England decision on interest rates and tomorrow's key US jobs data.

At the close, the benchmark FTSE 100 index was 30.2 points lower at 5,253.2 after a see-saw session, having reversed from an intraday peak of 5,305.41.

A sluggish opening on Wall Street, where slower-than- expected service sector growth and poorly-received results from US drugs giant Pfizer, dented investor confidence closer to home.

CMC Markets analyst James Hughes said: "It's been another session where the FTSE has had to struggle to keep its head above water but, unlike (Tuesday], it failed. It could be the case that we are in fact in the calm before the storm as the next couple of days promise to jump the volatility up a couple of notches with the BoE rate decision and Friday's US jobs report."

Standard Life bucked the slide after cheering investors with its latest sales figures. The Edinburgh-based firm was up more than 3 per cent or 6.9p to 204.6p after posting a smaller-than-expected 7 per cent decline in sales for 2009, helped by a stronger second half of the year as market conditions improved.

Standard's update provided a boost to other stocks in the sector, with Prudential up 15.5p to 608.5p.

BP meanwhile picked up 2.3p to 574.3p – after heavy falls on Tuesday following annual results – as its new chairman bought 750,000 shares.

Firmer metal prices meant miners were among the early risers, but they later slipped as the dollar gained strength against the euro. Antofagasta and Lonmin were the sector's two biggest fallers, down 28p to 901.5p and 56p to 1,880p, respectively.

Barclays set the pace in the banking sector after a gain of 5.7p to 295.35p.

HSBC was off 2.2p at 681.3p, despite Credit Suisse raising its forecast for pre-tax profits in 2009 and highlighting further improvement in US credit quality. Royal Bank of Scotland, which is reportedly facing a lawsuit from a US property developer, was also in the doldrums, slipping 0.77p to 35.38p. Lloyds Banking Group lifted 0.75p to 55p as Bank of America Merrill Lynch resumed coverage on the bank, and Barclays, with "buy" ratings.

AstraZeneca was the biggest faller in the top flight after Swiss firm Roche's annual numbers disappointed analysts and the stock turned ex-dividend, meaning investors are not entitled to the latest payouts. Astra lost 104p to 2,827p, a fall of more than 3 per cent, while GlaxoSmithKline dipped 5p to 1,220p ahead of its figures this week.

Outside the FTSE 100, shares in Carpetright were down by more than 2 per cent after the floor coverings retailer reported a slowdown in recent sales growth. The group said weather conditions meant like-for-like sales were ahead by 2.3 per cent in the 13 weeks to 30 January, down from 3.9 per cent growth in the previous six months. The stock gave back recent gains to stand 29p lower at 943p.

Party Poker owner Party-Gaming moved in the opposite direction, up 0.2p to 285.1p, after analysts praised a strong fourth-quarter trading update and said the company's outlook appeared bullish.

It was joined on the FTSE 250 risers' board by a clutch of housebuilders as confidence in the sector continued to show improvement.

Taylor Wimpey led the way with a gain of nearly 4 per cent, up 1.55p to 41.25p, while Redrow was ahead 4.7p to 141.9p and Bellway lifted 14.5p to 775.5p.