FTSE ends six-day winning streak

The leading stock index broke a six-day winning streak yesterday on profit taking especially in banks and commodity shares, leaving some investors wondering whether the recent rally is close to its conclusion.

The FTSE 100 closed down 38.53 points, or 0.7 per cent, at 5134.36 points, after hitting a new 12-month high last week when it topped 5,100.

"The growing sense of optimism left by (Federal Reserve Chairman) Ben Bernanke's comments last week has left many investors worrying that the top of this recent move higher is close, so today's profit taking and position posturing may have a worrying undertone to it," said Jimmy Yates, head of equities at CMC Markets.

Equities that have led the recent recovery were hit hardest with miners topping the list of fallers.

Kazakhmys fell 3.3 per cent after Citigroup cut its rating on the stock to "hold" from "buy," while Vedanta Resources shed 3.5 per cent after Goldman Sachs downgraded its stance on the stock to "neutral" from "buy."

BHP Billiton fell 2.7 per cent. The mining giant plans to use part of a cash surplus of around $18 billion to fund a round of acquisitions, possibly involving some large rivals, The Wall Street Journal reported.

Fellow miners Lonmin , Fresnillo and Xstrata lost between 2.5 and 3.6 per cent.

Banks were led lower by Royal Bank of Scotland , which lost 5.2 per cent after a report the lender was considering a cash call was met with lukewarm enthusiasm by investors.

RBS is talking to investors to gauge support for a 'modest' equity placement of £3 billion to £4 billion, a source familiar with the situation said on Sunday, with the share issue to be used to replace a small portion of the government's economic interest in the bank.

Lloyds Banking Group , which last week said it was looking for ways to reduce its exposure to the government's insurance scheme for toxic assets, shed 2.8 per cent, while Barclays , HSBC and Standard Chartered fell 1 to 1.5 per cent.

Energy stocks were mixed as crude dropped below $70 a barrel. Tullow Oil lost 1.8 per cent, after a strong run last week when it reported new oil discoveries, while BG Group and Cairn Energy were 2.5 and 0.4 per cent lower.

Royal Dutch Shell was 0.3 per cent higher, supported by a Banc of America-Merrill Lynch upgrade to "buy", while BP was up 0.4 per cent.

The uncertainty saw some defensives lend support on the upside as investors sought refuge in risk averse issues.

GlaxoSmithKline and Shire advanced 0.3 and 0.8 per cent each, while AstraZeneca added 0.7 percent as Nektar Therapeutics said it signed a worldwide licensing deal with the company to develop two of its experimental drug candidates.

Marks & Spencer found some strength from a target price hike by Société Genéralé to 500 pence from 445 pence. The retailer gained 1.6 per cent.

Data from both the UK and the United States failed to ease investor anxiety.

Britain's Rightmove said asking prices for homes in England and Wales are, on average, 1.5 per cent lower this month than a year ago.

In the United States, a leading measure of the US economy's prospects rose for the fifth straight month, but missed economist forecasts.