Britain's FTSE falters ahead of holiday, banks in focus

LONDON: Britain's top share index declined on Thursday as financials, energy stocks and firms trading ex-dividend weighed, though volumes were light ahead of a market holiday.

The blue-chip FTSE 100 index was down 0.3 percent at 7,327.59 points at its close, in line with a broader decline on European markets.

"We're seeing a bit of risk-off ahead of the bank holiday weekend," said John Moore, a trader at Berkeley Capital.

The FTSE 100 also posted a slight loss for the week.

Financials were the biggest drag on the FTSE 100, taking off nearly 10 points. HSBC, Standard Chartered and Royal Bank of Scotland all fell by 1.3 percent to 1.7 percent, with broadly well-received earnings releases from their US peers failing to boost sentiment.

"The only thing I can attribute it to is a bit of pessimism coming back into the industry that all is not ok at the top of these banks, and there's still a bit of rot there," Jonathan Roy, advisory investment manager at Charles Hanover Investments, said, referring to the news earlier this week that British regulators are investigating Barclays' CEO over a whistleblowing incident.

"Couple that with a market that is already high, and there's very few catalysts to take these stocks higher."

Energy stocks also dragged, taking off around 9.7 points. Royal Dutch Shell fell 1.2 percent, and BP was down 0.3 percent as the price of oil edged lower.

Stocks trading without rights to their latest dividend payout dragged, including Standard Life, which dropped 2.4 percent and was the biggest individual faller.

Primark-owner Associated British Foods jumped 3.6 percent to its highest level since the beginning of January after Jefferies raised its rating on the stock to a "buy", citing continued strength in sugar and a turn in Primark margins .

"The 19 April interims should confirm strong results ... thanks to fx translation boost and a sugar rebound. We also expect a more assured message on the Primark margin outlook," analysts at Jefferies said in a note.

Precious metals miners were also in demand, with Fresnillo and Randgold Resources both gaining 1.5 percent.

The underlying price of gold hit a five-month peak as investors sought safe-haven assets amid rising geopolitical tensions over US relations with Russia and North Korea. A weaker US dollar also helped.