Financial stocks weighed on Britain's FTSE 100, after disappointing updates from Lloyds and Schroders knocked confidence, while investors continued to drain profits out of commodity stocks, according to Reuters. The index showed little change after the Bank of England's monetary policy committee voted to keep British interest rates at an all time low of 0.5 percent. Recent economic data further highlighted the fragility of the recovery as Britain's dominant service sector slowed more than expected in April. Investors awaited interest rate decisions from mainland Europe at 1145 GMT. By 1113 GMT, the FTSE 100 was down 46.76 points, or 0.8 percent, at 5,937.31, having fallen 1.6 percent on Wednesday, weighed by commodity stocks, following poor data in the UK and U.S. and fiscal tightening pressures from China and India. "If the stock market comes off with commodities it might give (central banks) the opportunity to keep rates lower for longer," said Nick Serff, market analyst at City Index. Banks fell after Lloyds Banking Group, down 8.6 percent in heavy trade, took a 3.2 billion-pound (5.3 billion) hit for mis-selling debt repayment protection insurance. British blue-chip investment manager Schroders fell 6.3 percent after suffering an unexpected loss on its investments in the first quarter. Paul Mumford, who manages a 25-million-pound fund at Cavendish Asset Management, said despite the setback after Lloyds' update banks were among a number of recovery sectors, which also included retailers and property firms, that have further to run. "Over a whole raft of sectors the UK market offers pretty good value," he said. Despite macro uncertainty, British companies continue to perform well. Miner Randgold Resources, up 0.6 percent, bucked a weaker mining sector after posting a 92 percent jump in first-quarter profit. Smith & Nephew climbed 2.6 percent, after the artificial knee and hip maker posted solid first-quarter results, prompting Investec Securities to upgrade its rating to "buy" from "hold". Drinks maker Diageo, up 1.4 percent, beat forecasts for sales growth in the first three months of 2011. Rexam climbed 1.3 percent after the drinks can maker reported first-quarter trading. Wm Morrison Supermarkets rose 0.7 percent after beating quarterly sales forecasts amid a tough consumer backdrop.
