London close: Stocks retreat from record with investors nervous ahead of busy week

LONDON (ShareCast) - Decent gains from financial stocks were outweighed by heavy falls in the mining sector on Monday as the UK equity market pulled back from a record high reached last week. Political uncertainty and nervousness ahead of busy week had prompted a bout of profit-taking in London, with the FTSE 100 down 0.36% at 7,064.30 by the end of trade. Mining stocks in particular were falling sharply as a number of investment banks lowered their price assumptions for iron ore.

The Footsie reached a new all-time closing high of 7,089.77 on Friday, setting an intraday record of 7,095.36 that same day.

Investors were treading carefully ahead of a busy week on the market worldwide with UK inflation, US retail sales and a policy meeting at the European Central Bank (ECB) likely steal the spotlight over the coming days.

Wednesday's gross domestic product figures from China will also be in focus after figures overnight revealed that Chinese exports dropped at an annual rate of 15% in March, causing the trade surplus to drop significantly.This was a significant miss on the 10% increase expected by analysts and added to speculation that Beijing will inject further stimulus measures to prop up the economy.

Closer to home, the UK election campaign stepped up a gear over the weekend with various parties continuing to come out with promises in a bid to secure votes. However, the latest polls continue to showed a big variation with just four weeks to before voting begins.

"These last two polls [YouGov (LSE: YOU.L - news) and The Guardian] are a sign of the kind of uncertainty the nation faces. If this kind of divergence keeps up, it's a real risk to the new record highs being set by UK stocks and the value of the British pound," said analyst Jasper Lawler from CMC Markets. In other news, ECB bond buying slowed down slightly in the fifth week of its quantitative easing (QE) programme, purchasing €9.159bn of bonds. This was less than it had bought the previous seven days and below the average amount needed to keep its QE programme on track.

Mining stocks tank Citigroup (NYSE: C - news) , UBS and S&P all lowered their price forecasts for iron ore over the coming years, sending shares across the mining sector lower. Citigroup in particular lowered Rio Tinto (Xetra: 855018 - news) , Glencore (Xetra: A1JAGV - news) , BHP Billiton (NYSE: BBL - news) and Lonmin (LSE: LMI.L - news) to 'neutral' and cut Vedanta Resources (Other OTC: VDNRF - news) and Anglo American (LSE: AAL.L - news) to 'sell', as it shifted its stance on the sector to 'neutral' from 'bullish'.

A number of gold miners, however, were bucking the trend, including Fresnillo (Other OTC: FNLPF - news) , Centamin (Toronto: CEE.TO - news) and Acacia Mining (Other OTC: ABGLF - news) .

Financial stocks were outperforming, with Aviva (Other OTC: AIVAF - news) , Barclays (LSE: BARC.L - news) , RBS (LSE: RBS.L - news) , HSBC and Hargreaves Lansdown (LSE: HL.L - news) among the best performers. Aviva was rising on the first day of trading after taking over Friends Life, as analysts at Barclays, JP Morgan and Morgan Stanley (Xetra: 885836 - news) raised their ratings on the stock.

HSBC was boosted after Morgan Stanley lifted its rating on the stock to 'equal weight' following a 17% underperformance against the Stoxx 600 banks index so far this year.

Tesco (Xetra: 852647 - news) was among the worst performers in the aftermath of a research report on Friday from Barclays, which said the retailer could follow in the footsteps of Morrison and Sainsbury by taking a large property impairment in its annual results on 22 April - "c£3bn does not seem an unreasonable estimate", Barclays said.

Market Movers techMARK 3,260.87 -0.40% FTSE 100 7,064.30 -0.36% FTSE 250 17,829.83 -0.25% FTSE 100 - Risers Ashtead Group (LSE: AHT.L - news) (AHT) 1,093.00p +1.58% Royal Bank of Scotland Group (RBS) 353.20p +1.23% Aviva (AV.) 561.50p +1.17% HSBC Holdings (Xetra: HBC2.DE - news) (HSBA) 618.00p +0.96% Barclays (BARC) 259.45p +0.93% Royal Dutch Shell (Xetra: R6C1.DE - news) 'B' (RDSB) 2,065.50p +0.85% Fresnillo (FRES) 709.50p +0.85% Merlin Entertainments (LSE: MERL.L - news) (MERL) 458.80p +0.81% BG Group (LSE: BG.L - news) (BG.) 1,177.00p +0.77% Hargreaves Lansdown (HL (Shenzhen: 002105.SZ - news) .) 1,237.00p +0.65% FTSE 100 - Fallers BHP Billiton (BLT) 1,416.00p -3.25% Tesco (TSCO) 244.30p -2.67% Antofagasta (LSE: ANTO.L - news) (ANTO) 722.00p -2.50% Anglo American (AAL) 998.70p -2.28% Pearson (PSON) 1,443.00p -1.90% Burberry Group (Other OTC: BBRYF - news) (BRBY) 1,778.00p -1.55% Glencore (GLEN) 285.15p -1.55% Imperial Tobacco Group (IMT) 3,233.00p -1.49% Marks & Spencer Group (MKS) 567.00p -1.48% GKN (GKN (LSE: GKN.L - news) ) 355.90p -1.47% FTSE 250 - Risers Home Retail Group (HOME) 174.40p +5.63% Indivior (Berlin: 2IV.BE - news) (INDV) 219.90p +4.07% Drax Group (LSE: DRX.L - news) (DRX) 408.00p +3.16% Acacia Mining (ACA) 287.60p +3.16% De La Rue (Other OTC: DELRF - news) (DLAR) 598.00p +3.10% Bank of Georgia Holdings (BGEO) 1,967.00p +2.98% Centamin (DI (KSE: 003160.KS - news) ) (CEY) 60.50p +2.89% Aveva Group (Other OTC: AVEVF - news) (AVV) 1,587.00p +2.59% Tullow Oil (LSE: TLW.L - news) (TLW) 339.50p +2.54% Just Eat (Other OTC: JSTLF - news) (JE.) 449.60p +2.44% FTSE 250 - Fallers Ladbrokes (LAD) 105.50p -3.39% Lonmin (LMI) 125.60p -3.38% Redefine International (RDI) 57.25p -3.38% Daejan Holdings (LSE: DJAN.L - news) (DJAN) 5,750.00p -3.36% Big Yellow Group (BYG) 684.50p -2.91% Law Debenture Corp. (LWDB) 518.50p -2.72% Millennium & Copthorne Hotels (LSE: MLC.L - news) (MLC) 575.00p -2.46% Ashmore Group (Other OTC: AJMPF - news) (ASHM) 306.80p -2.45% Ocado Group (Other OTC: OCDGF - news) (OCDO) 366.40p -2.29% BlackRock World Mining Trust (BRWM) 292.20p -2.24%