LONDON MARKETS: FTSE Drops As Hopes For Further Stimulus Fade
08/15/2012| 05:17am US/Eastern
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By Preeti Upadhyaya, MarketWatch
LONDON (MarketWatch) -- The U.K. benchmark stock index declined on Wednesday as markets across Europe lost momentum as investors lowered expectations for further monetary-policy easing.
The FTSE 100 was off 0.5% at 5,833.71, after closing at its highest level since April 2 on Tuesday.
European stocks fell as strong retail sales in the U.S. on Tuesday dashed hopes for further monetary easing, while the Financial Times reported that Greece would seek a two-year extension of its austerity program.
In the U.K., the Office for National Statistics reported Wednesday that the unemployment rate was 8% for the three months to June 2012, down 0.2 percentage points over the quarter. .
Elsewhere in the U.K., minutes released by the Bank of England showed that the central bank voted 9-0 to leave key interest rates unchanged in August.
Mining firms led the downward trend, with Rio Tinto PLC (>> Rio Tinto plc) easing 2.7% and Eurasian Natural Resources Corp. PLC down 3.1%. Anglo American PLC slipped 2% and BHP Billiton PLC (>> BHP Billiton Limited) was off 1.9%.
Metals prices were lower.
Tobacco companies also added pressure after an Australian law was passed banning almost all branding from cigarette packaging.
Imperial Tobacco Group PLC fell 1.9% and British American Tobacco PLC (>> British American Tobacco plc) was down 1.1%.
Moving in the other direction, life insurance firm Resolution Ltd. was up 4.9% after releasing results for the first half of the year. The company announced it would be "simplifying the governance structure" and raised interim dividends by 5%.
Standard Chartered PLC was up 3.8% after it announced late Tuesday that it would pay $340 million to settle with New York's Department of Financial Services.
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