Britain's leading share index closed marginally lower on Monday, as weaker financials prevailed over a mining rally inspired by upbeat economic data from China. Chip designer ARM Holdings was the top riser, up 6.6 percent, with traders citing favourable broker comment as the mobile world met in Barcelona.
Goldman Sachs said ARM's management underscored its bullish view of the company's long-term opportunities, adding "there's clearly room for ARM's royalty rate (from licence agreements) to increase over the next five years".
Morgan Stanley, meanwhile, said "tablet demand is still underappreciated" by the market. Nearly all the world's mobile phones and tablets use ARM's low-power technology. The FTSE 100 closed down 2.81 points, or 0.1 percent, at 6,060.09, having hit a 2-1/2 year-high earlier. Banks and insurers were weaker as concerns over Europe's debt situation and the precariousness of global recovery remained in focus.
Lloyds Banking Group fell 1.6 percent, while Barclays, which kicks off the reporting season with full-year results on Tuesday, shed 0.1 percent. Data suggested Portugal headed back into recession in the last quarter of 2010. Traders also cited technical factors for holding back Britain's FTSE 100, after gaining some 3 percent in February.
"After the big run-up we have seen since the end of January a phase of consolidation is arguably overdue," Yusuf Heusen, senior sales trader at IG Index, said. International Consolidated Airlines Group shed 1.6 percent as brokers cut target prices for the airline after last week's warning from European peer Air France-KLM. Miners rose as Chinese economic data showed a smaller-than- expected trade surplus in January. African Barrick Gold was up 2.9 percent.
Traders also cited talk that Chinese inflation could come in lower than expected, easing fears of more interest rate rises in the world's biggest consumer of commodities. India-focused Essar Energy gained 2.7 percent as BofA Merrill Lynch started coverage of the stock with "buy".
Oil services blue chip Petrofac, up 2.5 percent, got a boost from acquisition moves in the sector. Invensys and Weir Group rose 3.4 and 4 percent respectively, with traders citing an interview in the Financial Times quoting Siemens' chief financial officer - saying the German conglomerate was interested in making acquisitions - as helping lift engineering blue chips. Mid-cap energy services firm John Wood Group jumped 13.9 percent as General Electric Co bought one of its units. Exillon Energy soared 15 percent after saying an independent study led to a 74-percent increase in its estimated oil reserves.