FTSE hit by China bank measures

Moves by China’s central bank to curb inflation has weighed on stocks on both sides of the Atlantic.

The FTSE 100 Index pared back losses on Friday but still stood 38 points lower at 5985.7, pulled down by mining stocks due to the China concerns.

Wall Street’s Dow Jones industrial average saw a mixed opening after US retail sales also came in lower-than-expected, rising 0.6% in December against a 0.9% forecast. News of a better than expected 48% leap in annual profits for American investment bank JP Morgan Chase failed to lift the US market.

Energy firms declined as investors were concerned by Chinese moves to fight inflation, as the central bank raised the reserve requirements for the country’s biggest lenders. Further monetary tightening measures could suppress Chinese demand, on which energy and mining companies rely heavily.

Miners were among the biggest fallers as metal prices softened, with silver giant Fresnillo at the top of the fallers’ board, slipping nearly 4%, or 62p, to 1496p while Anglo American was close behind with a 120p fall to 3290p.

Slipping oil prices also impacted the top tier, with BP shedding 3.1p to 500.6p, Royal Dutch Shell off 24p at 2096p and Cairn Energy down 4.9p at 449.8p.

Traders moved their cash into more defensive stocks, with utility firms such as Severn Trent and International Power featuring on the risers board – up 7p to 1426p and 4.9p at 415p respectively.

Corporate news was focused outside the FTSE 100 as smaller caps reported on recent trading.

Fashion chain Ted Baker saw shares drop more than 1% after the retailer reported a slowdown in group sales growth as UK trading was hit by the extreme weather in the run-up to Christmas.

The British designer brand reported a 7.6% rise in group retail sales for the eight weeks to January 8, compared with 8.6% in the third quarter to November 13. Shares were down 8.5p at 659.5p.