London - Britain's top share index gave away early gains on Thursday, led down by retailer Marks & Spencer, as optimism over its trading update dissipated following a conference call.
Marks & Spencer had traded as much as 3 percent higher in morning deals, following a trading update that showed its turnaround programme may finally be getting results.
But then it dropped as much as 2.7 percent below its opening price, taking it to the bottom the index, after an analyst call.
The decline reflected concern about profit margins and a delay in any strategic update.
“It seemed like good news across the board at the open, but conference calls often have a big effect. This sector is certainly one that tends to see a lot of movement on any potential outlook,” said Toby Morris, senior sales trader at CMC Markets.
The blue-chip FTSE 100 index edged up 0.1 percent to 6,639.93 points by 12:39 SA time, giving away an earlier 0.8 percent gain.
The index is still down nearly 1.6 percent this year after, surging 14 percent in 2013.
Banks rose 0.9 percent, but other growth-sensitive stocks, such as mining companies, managed only short-lived gains.
Those come after minutes of a Federal Reserve meeting shifted the outlook for when US interest rates would start to rise, to later than had been expected.
Trading interest-rate futures showed expectations of a first rate hike had been pushed out by about six weeks, to July 2015.
Traders said the market was now less sensitive to dovish noises by central banks than it had been.
“The party effect is lasting shorter and shorter every time,” CMC's Morris said.
“It was taken as being a fairly dovish statement, but you can be fairly confident that last year stocks would have rallied off the back of that for a lot longer. There was still a rally, but it's being given back straight away.”
Analysts said the stock market remained vulnerable to geopolitical tension in Ukraine and concern about growth in China, the world's biggest metals consumer and the second-biggest economy.
Mining shares came under more pressure from China, where Premier Li Keqiang ruled out major stimulus to fight short-term slowdowns, even though data showed imports and exports fell in March.
Signs that the world's second-largest economy was starting to slow had reinforced expectations the government would take steps to stimulate growth.
Li stressed on Thursday the government's policy priority was job creation.
He told an investment forum it did not matter whether growth came in a little below the official target of 7.5 percent.
Charts showed the FTSE 100 had slipped into a short-term range, with resistance at 6,700 and support at around 6,500.
“The strength of the long-term trend still implies that any break is likely to be to the upside, but the fact that the index is struggling to get away from the lows is still a cause for concern,” Charles Stanley technical analyst Bill McNamara said. - Reuters