By Barbara Kollmeyer
MADRID (MarketWatch) -- A pullback for mining stocks and some
gloomy corporate and economic news was darkening the mood for the
FTSE 100 on Thursday, as the Bank of England held its key meeting
to decide monetary policy.
The FTSE 100 index fell 0.1% to 5,674.34, less pronounced than
some of the weakness on the Continent, but still breaking a two-day
positive run.
Gold futures continued to push into record territory on
Thursday, with the December contract touching $1.366 an ounce at
one point, but miners were retreating from gains seen in recent
days. Gold has been particularly strong on expectations central
banks will be more likely to embrace another round of quantitative
easing.
The Bank of England will announce its own decision on interest
rates at 7 a.m. Eastern time. Though no one expects a change in key
rates, using quantitative easing as a means of spurring economic
growth is not out of the realms of possibility, say analysts.
Also pressuring markets, the Halifax House Price Index Thursday
reported prices down 3.6% for September, the biggest monthly drop
since records began in 1983. Other data showed industrial
production rose 0.3% in August, up 4.2% on an annual basis, in line
with expectations.
"Though the [Bank of England's Monetary Policy Committee] is
widely expected to maintain interest rates at 0.5% for a 19th
consecutive month, the announcement at midday gives traders a
wait-until-we-see destination to look forward to, with the
afternoon session likely to give greater clues as to whether the
FTSE will build on two days of gains and push on towards 5,700,"
said Will Hedden, sales trader at IG Index.
The recent strong run seen by miners was too much for some
investors to pass up, with selling across most big names such as
Kazakhmys PLC, off 3.8%, and Antofagasta PLC , down 2.7%.
Retailers were putting in a mixed performance in London. Shares
of Marks & Spencer rebounded from earlier losses and were last
up 1% despite the fact it sees trading conditions worsening and
costs rising.
Shares of smaller-cap retailer Mulberry Group jumped 17% after
it said sales and profit for the year ending March 31 would come in
well ahead of expectations. It said the Christmas trading period,
though, would be crucial for the group.
Recruitment groups Hays PLC and Michael Page International PLC
updated investors on trading and conditions. Shares of Hays fell
2.7% despite the group reporting a 21% gain in net fees in the
fiscal first quarter, driven by a big rise in the Asia-Pacific
region.
Michael Page shares fell 4.7%. The group said gross profit was
up 37%, with permanent recruitment activity up and temporary
activity also showing growth for the first time this year.