Edinburgh - Britain's top share index edged lower on Thursday, under pressure from commodity stocks after the Federal Reserve struck a surprisingly hawkish tone in its outlook for US interest rates.
The FTSE 100 gave away early gains to trade 0.2 percent lower at 6,442.51 at 11:03 SA time, underperforming a 0.4 percent rise on the FTSEurofirst 300 and German DAX and a 0.7 percent rise on the CAC.
Miners, commodity and oil related stocks, which have a heavy weighting in Britain's top index, combined to take more than 10 points off the FTSE, enough to take it into negative territory.
Oil, copper and gold prices, which are priced in dollars, came under pressure after the greenback benefited from the Fed's rhetoric, which painted a brighter outlook for the U.S. economy and could see interest rates rise sooner than expected.
Nine of the top 10 fallers on the FTSE were commodity related.
Providing support to the market, Barclays Plc rose 2 percent, contributing 2.8 points to the FTSE 100, after it posted a rise in third quarter profits despite setting aside 500 million pounds (R8.8 billion) to cover potential fines for manipulating currency markets.
Earlier in the week, Lloyds saw its shares drop sharply after receiving a $1.5 billion dollar charge, despite posting encouraging profits.
“For Lloyds, there was a concern that a dividend won't be paid for a little while longer. By contrast, Barclays is a turnaround play which is starting to bear fruit, even with the currency charge,” Chris Beauchamp, market analyst at IG, said.
“But in general, the earnings reports from financials have been in pretty strong.”
British wealth manager St. James's Place Plc rose 2.8 percent, the top FTSE 100 gainer, after it posted a 17 percent rise in funds under management as more affluent clients sought out its services.
While the broader index struggled to make headway on Thursday morning, the FTSE is up 6 percent in the last few weeks, above the 6,400 level which could act as support should it fall further.
“The UK flagship index FTSE 100 continues to try higher, and now above 6,400 we still expect this to prove supportive for any pull-back,” Mike van Dulken, head of research at Accendo Markets, said in a note. - Reuters