Britain's Top Share Index FTSE Eases Back From Four-Month Highs.

01:51 Unknown

The London Stock Exchange building is seen in central London September 24, 2009. Credit: Reuters/Stephen Hird.

I n a report by Reuters,  Britain's top share index slipped back off four-month highs on Friday, weighed down by weakness in commodity stocks after poor trade data from China, the world's biggest consumer of metals.

Figures released on Friday showed China's exports grew just 1.0 percent in July from a year earlier, much weaker than market expectations for an 8.6 percent rise, while imports grew only 4.7 percent, against predictions for a 7.2 percent gain.

At 0807 GMT, the FTSE 100 index was down 3.6 points, or 0.1 percent at 5,847.91, having added 0.1 percent in the previous session to notch up a fifth straight session of gains, with the index having advanced around 3 percent over that period.

That strengthened the case for the People's Bank of China to move to bolster its economy, at a time when other major central banks are already under pressure - but not yet entirely willing - to act.

"It's been a good run but there is still a very fragile feeling to the market, exacerbated by the low summer volumes and lack of fresh news for direction aside from the will-they-won't-they on central bank stimulus measures," said Mike Mason, a senior trader at Sucden Financial.

"It's no surprise that those risk-sensitive sector, such as the miners and the banks which led the run up are slipping back on a quiet Friday," Mason added.

Miners retreated in line with a drop back by copper prices, which fell over 1 percent as a deteriorating economic backdrop overshadowed recent hopes by many that the recent weak data will push major economies like China towards more aggressive stimulus policies.

Rio Tinto, which saw good gains following well-received first-half results on Thursday, fell 1.0 percent.

Banks were also weak, although Barclays bucked the trend, adding 1.0 percent as investors welcomed the appointment of City grandee David Walker as its new chairman. That showed the bank moving quickly to fill a void and picking a corporate governance expert to lead a recovery from the Libor interest rate rigging scandal.

"This is an important step forward addressing key management gaps in the company," Mike Trippitt, banks analyst at Oriel Securities said.

Broker comment provided the reasoning behind the blue chip index's biggest gainer and its biggest faller.

Testing equipment firm Intertek Group added 1.6 percent with traders citing the impact of a target hike by Citigroup, to 3,150 pence from 2,800 pence.

Packaging group Bunzl, down 3.4 percent, was hit by a downgrade to "sell" from "neutral" by UBS, with the broker saying the stocks' 70 percent gain over the last 12-months leaves risk skewed to the downside.

"Although Bunzl is a ‘roll-up' story, its share price has historically been sensitive to its organic sales growth trend, which we expect to slow ... (and) while Bunzl's extensive re-rating anticipates future earnings per share (EPS) upgrades, we no longer see material upside to numbers," UBS said in a note.