StockMarketWire.com - END-OF-DAY REPORT: Headline shares ended the session sharply lower, with Barclays and HSBC leading the banking sector down, mining issues tumbling as metals prices eased, and as Wall Street recorded firm losses in morning deals.

At the close of play, the FTSE100 was down 93.6 points at 4,383.42, while the FTSE250 dipped 83.87 points at 7,688.19 and the FTSE Smallcaps 2.64 points lower at 2,311.53.

NEW YORK

US stocks were lower ahead of congressional testimony by Fed Chairman Ben Bernanke and the latest service sector activity data, disregarding better-than-expected new jobs data.

As London closed, the Dow Jones Industrial Average was down 70.73 points at 8,670, The Nasdaq Composite fell 10.73 points at 1,826 and the S&P500 dipped 11.61 points at 933.13.

LONDON MARKETS

Yesterday's move by Abu Dhabi's IPIC to take profits from the sale of 11% of its stake in Barclays raised concerns that other investors will be looking to take profits in banking stocks after their recent revival.

As a result, Barclays dropped a further 13.75p at 259.75p, Lloyds fell 3.5p at 66p and Royal Bank of Scotland slipped 2p at 36.1p.

HSBC slipped 5.5p at 529.5p on rumours that Saudi Arabia's Saad Group may look to reduce its holding in the bank.

Non-life insurer Amlin gained 2.5p at 341.5p on news it is taking over Fortis Corporate Insurance from the State of the Netherlands for €350m, part funding the acquisition by the issue of 23 million new shares.

Others in the sector demonstrated their fragility, with Prudential down 12.25p at 448p, Aviva off 18.5p at 334.5p and Standard Life 12.1p weaker at 190.4p.

Vodafone fell 5.8p at 113p following yesterday's warning of a reduction in the level of demand from the group's customers for existing and new products and services as the global recession bites. Cable & Wireless weakend in sympathy, down 5.7p at 128.8p, both companies additionally hit by trading ex-dividend.

BP fell 11.5p at 518.25p, after saying it is seeking to limit its heavy pension by withdrawing the final salary pension option for new recruits. Shell said it has no plans to follow BP's example, but the shares slipped 40p at 1,681p with the general market, despite crude remaining above $67 a barrel.

The mining sector lost ground as nervous investors took profits and headed for safety stocks and as metals prices weakened.

Vedanta was the biggest blue chip casualty of the day, down 137p at 1,582p, Xstrata tumbled 50p at 728p, Lonmin fell 58p at 1,510p and Anglo American was down 113p at 1,785p. Rio Tinto slipped 141p at 2,912p, also unsettled by unconfirmed reports it might re-visit the Chinalco deal and look to raise funds via a rights issue.

Siver producer Fresnillo bucked the trend, adding 5.5p at 728.5p.

British Airways dived 6p at 152.1p when the latest traffic figures published today showed a 17.2% decrease in premium traffic and a 4.2% fall in non-premium traffic in May, compared to the prior year.

Supermarket operators provided a rare bright spot, following news of improved consumer confidence in May, with Tesco gaining 0.9p at 353.3p, Sainsbury up 2.25p at 316.5p and Morrisons, the best of them ahead of a trading update tomorrow, 3.5p higher at 247.5p.

Other notable winners included construction giant Balfour Beatty, up 7.25p at 344.75p, the pick of the session, prosthetics maker Smith & Nephew, up 9.75p at 475p, broadcaster BSkyB, ahead 8.75p at 453.75p, and budget hotel operator Whitbread, 3.5p better at 903p.

Down the list, aerospace engineer Hampson Industries fell 8.5p at 98.5p on revealing it made a loss before tax, on a statutory basis, of £15.4m in the year to March 2009, after asset impairment charges totalling about £28m.

Construction industry software specialist Eleco tumbled 12p (24.7%) at 36.5p after warning that underlying market conditions remain uncertain.


Story provided by Business Financial Newswire