* FTSE 100 index finishes 1.1 pct lower
* Disappointing U.S. data hit banks, miners
* Vodafone slips as Verizon denies bid
By Atul Prakash
LONDON, April 3 Britain's top share index ended
lower on Wednesday, with poor U.S. data reigniting concerns
about the pace of recovery in the world's biggest economy and
hurting growth-linked sectors such as mining and banking.
Miners extended losses in afternoon trading after the ADP
National Employment Report showed lower than forecast private
sector jobs were added in March, while the Institute for Supply
Management's services sector index came in below expectations.
The UK mining index fell 2.4 percent, taking
the yearly losses to 12 percent, against a 9 percent rise by the
FTSE 100 index this year. ENRC, Xstrata and BHP
Billiton fell by between 2 to 4.6 percent.
"There is an element of disappointment in terms of the U.S.
data. Perhaps the weaker numbers that we saw today are just
being used by investors as an opportunity to take profits after
a very strong rally," Henk Potts, equity strategist at Barclays
The blue-chip FTSE 100 index finished 70.38 points,
or 1.1 percent, lower at 6,429.28 on concerns about the
sustainability of U.S. economic recovery and its impact on
metals demand and banking activities.
The UK banking index fell 1.6 percent, with
Barclays down 2.8 and Standard Chartered down
1.4 percent. Royal Bank of Scotland dropped 4.4 percent
as the launch of a 4 billion pounds ($6.05 billion) compensation
claim against the bank by investors further hurt sentiment.
After Wednesday's disappointing ADP Private sector jobs
data, investors' focus has shifted to widely-watched U.S.
non-farm payrolls data, due on Friday. Analysts forecast the
payrolls hit 200,000 in March, with the unemployment rate seen
holding steady at 7.7 percent.
"I expect to see a lot more risk aversion in the lead up to
Friday's figures now, with a poor jobs report potentially
marking the end of the record breaking bull rally. The only
question now is, how big will the correction be?," Craig Erlam
market analyst at Alpari said.
VODAFONE MAJOR DRAG
A sharp decline in heavyweight Vodafone, after
Verizon denied making a bid for the company, also put
pressure on the FTSE 100 index.
Vodafone took the most points off the index after its joint
venture partner Verizon Communications sought to end to rampant
bid speculation by saying it did not plan to buy the British
Vodafone fell 2 percent. However, analysts remained positive
on the stock, which has jumped about 25 percent since the start
of the year on the potential sale of the $115 billion stake.
"Holders shouldn't be too concerned at the lack of deal
talks confirmation," Mike van Dulken, head of research at
Accendo Markets, said.
"If anything, intensification of recent market talk just
serves to highlight, potentially even increase, the perceived
value of the U.S. wireless joint venture. Given this represents
Vodafone's most valuable asset ... this likely underpins the UK
giant's share price in the near term."
Technical analysts also remained of the view that the FTSE
100 index would resume it rally after a period of consolidation.
"The market is still in an uptrend and we just have to stay
with it," said Dominic Hawker, technical analyst at Westhouse
"Even if the index breaks its immediate support of 6,350 and
falls to 6,100, we would still be in the medium-term uptrend,"
he said, adding the index would face strong resistance at its
2007 peak of 6,750.
($1 = 0.6607 British pounds)
(editing by Ron Askew)