FTSE dragged lower by mining stocks
London's main benchmark struggled for direction despite strong UK services data Reuters

Blue chip shares struggled for direction despite strong UK economic data as traders mulled over the prospect of US rate rises.

The FTSE 100 Index slipped 3.6 points to 7,186.2 in afternoon trading, despite the UK service sector growing at its fastest pace for 17 months in December, according to a closely watched survey.

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The Markit/CIPS services purchasing managers' index rose to 56.2 last month, from 55.2 in November – the highest level since July 2015.

But traders were more concerned with last night's release of the minutes of the US Federal Reserve's December meeting.

Officials said they might have to raise interest rates faster than the "gradual" pace that they have stressed for some time due to impact of incoming US President Donald Trump's promised $1trn (£813bn) infrastructure stimulus. Cheap cash favours investors.

CMC Markets chief market analyst Michael Hewson said: "Last night's Fed minutes reinforced US policymaker expectations that we could well see multiple rate rises this year after last month's rate rise, though officials remained cautious given the lack of clarity on the type of fiscal expansion that might be forthcoming in the coming months."

In afternoon trading the biggest risers in the FTSE 100 Index were Persimmon (+107p to 1,917p), EasyJet (+43p to 1,052p), Taylor Wimpey (+6.2p to 167.6p), Smurfit Kappa (+64p to 1,984p) and International Airlines Group (+12.7p to 461.8p).

The biggest fallers in the FTSE 100 Index were Rolls-Royce (-27.5p to 640p), Standard Life (-10p to 368.4p), Prudential (-38.5p to 1,603.5p), Royal Mail (-9.4p to 454.3p) and Legal & General (-5p to 247.3p).

In afternoon trading the biggest risers in the FTSE 250 Index were Nostrum Oil & Gas (+35.7p to 426.7p), Acacia Mining (+23.2p to 396.6p), BTG (+35.5p to 624p), Crest Nicholson (+21.2p to 493.4p) and Hochschild Mining (+8.4p to 221p).

The biggest fallers in the FTSE 250 Index were PayPoint (-46.5p to 981.5p), GVC Holdings (-11p to 648p), Diploma (-17p to 1037p), Ferrexpo (-2p to 129.6p) and Cairn Energy (-3p to 237.2p).

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