RTRS: FTSE ends 6-day winning run, down 2.3 pct on commods
By Dominic Lau
LONDON, Nov 5 (Reuters) - Britain's leading share index fell 2.3 percent on Wednesday, ending a six-session winning streak, as investors shifted their focus back to the faltering economy after Democrat Barack Obama won the U.S. presidential race.
The FTSE 100 .FTSE closed down 108.77 points at 4,530.73, after gaining nearly 20 percent in the previous six sessions. More than 1.1 billion shares changed hands, compared to Tuesday's 1.49 billion and last week's average of 1.54 billion.
The UK benchmark is still down nearly 30 percent this year, part of a global equity slump sparked by a credit crisis that shook the world's top banks and slowed the economy.
Energy stocks took the most points off the index as crude prices CLc1 fell. BP (BP.L: Quote, Profile, Research, Stock Buzz), Royal Dutch Shell (RDSa.L: Quote, Profile, Research, Stock Buzz), BG Group (BG.L: Quote, Profile, Research, Stock Buzz), Tullow Oil (TLW.L: Quote, Profile, Research, Stock Buzz) and Cairn Energy (CNE.L: Quote, Profile, Research, Stock Buzz) shed between 1.9 and 4.8 percent. Shell also traded ex-dividend.
Some analysts said Obama was seen as anti-big oil companies so investors took profit in them.
Miners languished on weaker metal prices and after Morgan Stanley cut its price targets on a number of companies in the sector. [ID:nBNG177137]
Highlighting the weakness in the local economy, Britain's dominant services sector shrank in October at its fastest pace since the series began in 1996, data from the Chartered Institute of Purchasing and Supply said. [ID:nL5476149]
The grim data boosted the chance of a big Bank of England rate cut on Thursday. Analysts say whether the central bank cuts rates by 50 basis points or 100, borrowing costs are set to fall sharply from their current 4.5 percent in the coming months.
"The big thing is the rate decision tomorrow. Certainly, the market has priced in half (a percentage point), but fingers crossed for more. People have been calling for a 1 percentage point," said Mark Priest, a senior trader at ETX Capital.
"The FTSE 100 tomorrow probably won't do much until it comes out." Banks were weaker, with the FTSE 350 banks index off 0.8 percent. But Barclays (BARC.L: Quote, Profile, Research, Stock Buzz) and Royal Bank of Scotland (RBS.L: Quote, Profile, Research, Stock Buzz) advanced 5.4 and 5.8 percent, respectively.
"The rate cut is going to benefit everybody. However, if you think about what's happening to the share price of Barclays and RBS in the last week, they were trashed heavily, they are recovering ... They are playing catch up," a trader said.
OBAMA EFFECT
Worries about pressure on U.S. drug prices under the Obama administration saw European drug stocks underperform. [ID:nL5203005]
GlaxoSmithKline also said it is cutting about 1,000 jobs in its U.S. sales force by the end of 2008 as it reorganises the operation. [ID:nL5685881]
Old Mutual (OML.L: Quote, Profile, Research, Stock Buzz) sank 9.2 percent after going ex-dividend and after Morgan Stanley downgraded the stock to "equal-weight" from "overweight".
Within the sector, Aviva (AV.L: Quote, Profile, Research, Stock Buzz) fell 7.3 percent and Standard Life (SL.L: Quote, Profile, Research, Stock Buzz) slipped 1.8 percent.
Among other individual movers, British mid-market fashion retailer Next (NXT.L: Quote, Profile, Research, Stock Buzz) added 5.7 percent after it met its profit forecast, recovering from early losses on initial negative investor reaction to the company saying 2009 was going to be tough.
Bus and train operator FirstGroup (FGP.L: Quote, Profile, Research, Stock Buzz) advanced 3.3 percent after it said its second half had started well with trading in line with expectations. This boosted sentiment on the sector, helping lift rival Stagecoach (SGC.L: Quote, Profile, Research, Stock Buzz) 5.3 percent.
Unilever (ULVR.L: Quote, Profile, Research, Stock Buzz), however, fell after going ex-dividend. (Additional reporting by Simon Falush and Harpreet Bhal; editing by Simon Jessop)
