The leading share index closed lower on Thursday, led by weaker commodity issues as earlier gains were reversed in tandem with a weaker showing on Wall Street as Wednesday's boost from central bank intervention moves proved short-lived.
At the close, the FTSE 100 index <.FTSE> was down 16.08 points or 0.3 percent at 5,489.34, just off the day's low of 5,486.87, having reversed from a session peak of 5,553.89 in choppy trade following a 3.2 percent leap on Wednesday.
U.S. blue chips <.DJI> were down 0.3 percent by London's close, also having posted strong gains on Wednesday, after the latest weekly U.S. jobless claims rose by more than expected, creating some concerns ahead of Friday's November jobs report
Now that yesterday's central bank adrenaline shot has worn off, we have been digesting the fact that maintaining liquidity to prevent insolvent banks disappearing into the abyss does not fundamentally improve the bigger picture, said Will Hedden, Sales Trader at IG Markets.
Integrated oils <.FTNMX0530> were the biggest drag on the blue-chip index, led by BP
Miners <.FTNMX1770> fell back as copper prices lost ground after disappointing data from the U.S., China, Britain, and the eurozone heaped demand concerns on the sector.
China, which cut its banks' reserve requirement to shore up the economy on Wednesday, said its factory sector shrank in November for the first time in nearly three years.
Britain's manufacturing sector shrank for a second successive month in November and at its fastest pace since June 2009.
And the Euro zone's manufacturing sector contracted at its fastest pace in two years last month, as the downturn in the periphery took hold in the core.
Among miners, Vedanta Resources
RBC Capital Markets, meanwhile, lowered most of its 2012 forecasts for commodity prices, with the exception of aluminium and uranium, which it left unchanged, and cut target prices in the sector to take into account slower forecast growth.
Banks <.FTNMX8350> saw initial gains reversed, with the sector having leapt on Wednesday after the move by central banks to inject liquidity into the global financial system designed to easing the sector's funding constraints.
Lloyds Banking Group,
Nomura said it viewed Barclays as relatively investable among the domestic banks, despite the challenges BarCap faces, but Lloyds and RBS were more uncertain due to worries over the fundamentals of the sector despite cheap valuations.
Among blue chip gainers, Kingfisher
Defensive stocks were also in demand, with Imperial Tobacco
Mario Draghi, head of the European Central Bank, signalled the ECB was ready to take stronger action to fight Europe's debt crisis if political leaders agree next week on much tighter budget controls.
Politicians seem to be finally getting their act together and making some decisive decisions. We can only hope this trend continues as the global economy is shaky to say the least, said Simon Furlong, a trader at Spreadex.
(Editing by David Holmes)