May 2, 2013 / 8:07 AM / 5 years ago

Britain's FTSE pulled lower by Randgold ahead of ECB meeting

* FTSE 100 falls 0.2 percent

* Miners hit by Randgold profit drop, China growth fears

* Recent gains leaves ECB rate cut priced in by markets

* BG gains after good earnings, says projects on track

By Alistair Smout

LONDON, May 2 (Reuters) - Mining stocks dragged Britain’s top shares lower on Thursday following a disappointing update from Randgold that set the tone.

The market was also focussed on an expected interest rate cut from European Central Bank.

Randgold Resources fell 4.1 percent after the precious metals miner posted a steeper-than-expected fall in profit, hit by a drop in sales and lower prices.

Weak factory-sector growth in China also weighed on the mining stocks, which traded 1.4 percent lower as a sector. Local media in China reported that the government was considering downgrading its GDP target.

“With Japan’s and the EU’s growth stalled, China’s recovery is now even more linked to the success of the U.S. generating momentum in its economy and ... those concerns have returned,” said Ioan Smith, director at Knight Capital.

By 0753 GMT, the FTSE 100 was down 13.79 points, or 0.2 percent, at 6,437.50, with the mining sector providing four of the top seven fallers.

Concerns over fiscal tightening in the United States, known as the “sequester”, were compounded when Federal Reserve Chairman Ben Bernanke said fiscal policy was “restraining economic growth”, and gave no hints of additional asset purchases to support the economy.

Easy monetary policy has supported equity markets globally over the last year, and in Europe, expectations of a euro-zone rate cut to stimulate economic activity have helped push the FTSE up 2.9 percent over the last 10 days.

“With an ECB rate cut priced in, a sombre tone from the Fed and almost daily economic reminders that the global economy is stuttering, it looks like investors have seen enough and are trying to take profits where they can,” said Mike McCudden, head of derivatives at Interactive Investor.

Lending support to the FTSE were several upbeat company updates, including from BG Group, Royal Dutch Shell and Smith & Nephew.

BG led gainers, up 2.9 percent after it delivered better-than-expected quarterly earnings and gave reassurance that its huge growth projects were on track.

Editing by Jeremy Gaunt.

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