* FTSE 100 down 0.2 percent
* Miners hit by slide in China's factory activity
* BAE Systems drops on forecast earnings decline
By Alistair Smout
LONDON, Feb 20 Britain's top shares lost ground
on Thursday, hit by miners after a survey showed a drop in
China's factory activity, while BAE Systems slid after
forecasting a decline in earnings this year.
Investors found little respite in the minutes of the U.S.
Federal Reserve's latest policy-setting meeting, which indicated
that the central bank would keep trimming its bond-buying
stimulus despite recent weakness in economic data.
Basic materials stocks, including miners, exerted the most
downward pressure on the index, trimming 9.3 points off the
index after data from China reinforced concerns of a minor
slowdown in the economy.
Activity in China's factories shrank again in February, a
preliminary private survey found, spooking markets across the
"Economic growth in China is slowing still because of tight
monetary policy, and it won't change until they ease policy,"
Gerard Lane, equity strategist at Shore Capital, said.
"The pudding being eaten by the market at the moment is one
that has been baking for quite a while. At the moment, China
remains a negative story."
Defence contractor BAE Systems sank 8.2 percent in brisk
trade after it cautioned that continuing U.S. budget pressures
could reduce earnings per share by 5-10 percent this year.
BAE systems receives 44 percent of its revenue from the
"Awful headline figures from BAE Systems this morning," said
Jordan Hiscott, senior sales trader at Gekko Global Markets.
"As Western governments withdraw their military assets and
needs from deployments in Iraq and Afghanistan, defence cuts
could become more prevalent in the sector - this is undoubtedly
being highlighted in the figures this morning."
Trading volume in BAE stood at nearly 200 percent of its
90-day daily average, against the FTSE 100 of just 34
The UK blue-chip index was down 19.38 points, or 0.3
percent, at 6,777.33 points by 1124 GMT, trimming its rally
since an early February low to around 5.1 percent.
This leaves the index nearly 1.3 percent shy of a peak hit
in late January, before political and economic concerns in
emerging markets took their toll on equities.
"The main risk at the moment comes from emerging markets,
and the likes of Unilever and Diageo have been
impacted more than some of the domestically exposed names,"
Shore Capital's Lane said.