London close: FTSE pulls back from record as miners dip into the red

London's FTSE 100, which rose to a new all-time peak of 6,974.26 early on, finished 6.02 points lower (-0.09%) at 6,940.64.

The mining sector, which performed well in morning trade, had erased gains by the close as investors shrugged off a move by the People's Bank of China (PBOC) to boost growth and counter deflationary risks.

The PBOC cut its benchmark interest rate by a quarter point for the second time in three months, to 5.35%, and lowered its one-year benchmark deposit rate by the same amount to 2.5%.

Analyst Craig Erlam from Oanda said the rate cut only had a limited impact on the markets "in a sign that people remain unconvinced about the PBOC’s ability to shore up the slowing economy". He said: "The PBOC had to do something but markets are clearly not that impressed. A more significant slowdown looks inevitable, the only question is if a hard landing can be avoided."

Manufacturing PMIs in focus

There were contrasting data reports on Chinese manufacturing activity released overnight, but they both indicated an up-trend in growth for the sector. Both the HSBC/Markit and government manufacturing purchasing managers’ indices (PMIs) both came in ahead of expectations, rising to 50.7 and 49.9 respectively.

Meanwhile, the UK manufacturing PMI rose from 53.1 to 54.1 in February, while the final estimate of the Eurozone manufacturing PMI was broadly in line with the

Other data released confirmed that the Eurozone was in deflation for the third straight month in February, with consumer prices falling 0.3%, though not as bad as the 0.5% decline expected. The figures came ahead of a policy meeting on Thursday at which the European Central Bank will launch its €1trn quantitative easing programme.

Miners reverse after strong start

Mining stocks such as Rio Tinto, BHP Billiton, Randgold and Fresnillo were providing a drag on the FTSE 100, dropping into the red following a decent start.

Rio Tinto was in focus on the back of rumours it could exit from the coal market, with Glencore among those rumoured to be interested. Rio was also making headlines after the Australian Workers Union lambasted the company and fellow miner BHP Billiton for "their cartel-like behaviour".

Banking stocks such as Barclays and RBS were among the best performers as share prices rebounded after a weak outing last week following some poorly-received annual results. 2014 figures from Barclays, the last UK lender to report, are due out on Tuesday.

Intertek, the product testing and certification outfit, was higher after forecasting a improvement in organic revenue growth in 2015 after a 0.6% decline last year. Profits were down 4.7% in 2014, though the company still lifted its dividend by 6.7%

Oil stocks such as Tullow and Shell were trading lower as crude prices weakened with Brent down 3.4% at $60.47 a barrel.

Insurer Amlin disappointed after reporting a 21% drop in full-year pre-tax profit as the low interest rates environment together with a drop in investment return dented profitability.

Market Movers
techMARK 3,155.68 -0.15%
FTSE 100 6,940.64 -0.09%
FTSE 250 17,249.92 -0.14%

FTSE 100 - Risers
Royal Bank of Scotland Group (RBS) 378.30p +3.02%
Hargreaves Lansdown (HL.) 1,160.00p +2.65%
Barclays (BARC) 262.75p +2.28%
British Land Co (BLND) 845.00p +1.99%
ARM Holdings (ARM) 1,182.00p +1.98%
Carnival (CCL) 2,976.00p +1.85%
Land Securities Group (LAND) 1,278.00p +1.75%
Whitbread (WTB) 5,345.00p +1.71%
Capita (CPI) 1,207.00p +1.60%
Morrison (Wm) Supermarkets (MRW) 198.80p +1.58%

FTSE 100 - Fallers
Tullow Oil (TLW) 357.30p -7.75%
Shire Plc (SHP) 5,160.00p -2.18%
Royal Dutch Shell 'B' (RDSB) 2,159.50p -2.09%
Aggreko (AGK) 1,680.00p -1.64%
Babcock International Group (BAB) 994.00p -1.58%
Randgold Resources Ltd. (RRS) 5,100.00p -1.54%
Rolls-Royce Holdings (RR.) 934.50p -1.53%
Royal Dutch Shell 'A' (RDSA) 2,090.00p -1.32%
BHP Billiton (BLT) 1,595.50p -1.30%
Dixons Carphone (DC.) 434.90p -1.29%

FTSE 250 - Risers
Afren (AFR) 9.90p +15.11%
Allied Minds (ALM) 650.00p +9.24%
Oxford Instruments (OXIG) 798.00p +5.49%
Bank of Georgia Holdings (BGEO) 1,797.00p +4.17%
Keller Group (KLR) 1,053.00p +3.95%
Alent (ALNT) 364.70p +3.49%
Electrocomponents (ECM) 232.40p +3.47%
Great Portland Estates (GPOR) 822.00p +2.69%
Domino's Pizza Group (DOM) 741.00p +2.56%
Berendsen (BRSN) 1,128.00p +2.55%

FTSE 250 - Fallers
Amlin (AML) 496.60p -6.21%
Premier Oil (PMO) 158.10p -6.17%
Bwin.party Digital Entertainment (BPTY) 80.20p -5.98%
Ultra Electronics Holdings (ULE) 1,707.00p -5.17%
Cairn Energy (CNE) 195.20p -4.08%
Serco Group (SRP) 213.50p -4.00%
Aveva Group (AVV) 1,544.00p -3.20%
Supergroup (SGP) 943.00p -3.13%
Zoopla Property Group (WI) (ZPLA) 178.30p -3.10%
Kaz Minerals (KAZ) 246.00p -3.00%