The world’s fastest growing economy has hiked interest rates in a move that dragged mining stocks into negative territory.
Investors feared China’s decision to raise the one year deposit rate for the second time in as many months would weaken the country’s hunger for commodities.
Despite the pressure on resources stocks, the FTSE 100 Index was up 15.3 points to 6066.6, while in the US the Dow Jones Industrial Average was also marginally higher.
Among stocks on the back foot, Essar Energy was off 9.5p to 524p and Eurasian Natural Resources slipped 17p to 1027p.
Meanwhile, Chancellor George Osborne’s move to increase the levy on banks to £2.5 billion this year had little impact on leading shares in the sector.
Barclays and Royal Bank of Scotland, who are expected to help the government raise an additional £800 million from the balance sheet tax, were down 1.05p to 311.7p and 0.1p to 44.2p respectively.
Some of the stocks to make progress in a strong session gave back a slice of their gains, with chip designer Arm Holdings off 16p at 595p and Cairn Energy topping the fallers board, down 12.2p to 423.2p.
Marks & Spencer’s success in poaching a senior Tesco executive to lead its internet expansion caused the retailer’s shares to jump more than 3%, up 11.7p to 371.5p. The appointment of Laura Wade-Gery, which was announced after the market closed, should help chief executive Marc Bolland’s quest to lift web sales from £400 million to at least £800 million by 2013/14.
In corporate results, BG Group shares added 25p to 1465p after fourth quarter figures exceeded market expectations as higher energy prices helped the exploration giant offset a drop in oil and gas production. BG also upgraded its long-term production targets, notably for Brazil and the United States.
Thomas Cook shares rose 2% despite its warning that political unrest in travel hotspots Egypt and Tunisia would hit second-quarter profits by around £20 million.