The FTSE 100 index fell 20.22 points to 6,716.74, meaning it was only 1% higher in a week when Wall Street indices hit record highs on the back of Joe Biden signing his $1.9 trillion stimulus package and when European markets also made robust progress.
London’s sluggishness jarred with recent evidence that UK stocks have attracted more foreign backing since January’s Brexit trade agreement kicked in. The Financial Times also reported that Japanese investors had bought more UK government bonds since the start of the year than at any period on record.
But it was the US bond market where many London investors looked today after the 10 year yield revisited 1.6% to put tech-focused growth companies on the back foot after a brief respite.
The top flight’s weighting of commodities stocks was also a factor in the weak session after falls of more than 2% for Antofagasta and Fresnillo.
Banking stocks recovered some of the ground lost yesterday after the European Central Bank vowed to speed up the pace of its bond buying. Barclays rebounded 4.5p to 178.76p, with sentiment further aided by Goldman Sachs raising its target price to 240p.
There was little benefit from official figures showing a better-than-expected January for the UK economy, with the domestic-focused FTSE 250 index down 100.07 points at 21,433.03.
Fallers included Bodycote as the heat treatment and surface technology specialist reported a 44% slide in 2020 operating profits. It was impacted by the shutdown of car plants at the height of the pandemic but is now much more optimistic after completing a restructuring programme and reporting a number of growth opportunities.
Uncertainty in civil aerospace still clouds its outlook, however, leaving shares 6p lower at 796p.
British Gas owner Centrica got a confidence boost after SocGen switched to a “buy” rating and lifted its price target to 77p from 54p. The shares were a penny higher at 52.7p.
Another well-known London stock making moves today was Mothercare. The retailer first listed on the London Stock Exchange in 1972, but as an international franchise brand and now worth just over £50 million it is leaving the main market to join AIM.
Shares were 0.65p higher at 14.95p on its first day of trading on the junior market.