July 17, 2013 / 9:53 AM / 4 years ago

FTSE turns negative as Bank of England minutes disappoint

* FTSE 100 turns negative, down 0.4 percent
    * Bank of England minutes disappoint investors
    * Miners limit losses as BHP updates on output

    By Atul Prakash
    LONDON, July 17 (Reuters) - Britain's main share index
turned negative on Wednesday following publication of the Bank
of England's last policy meeting minutes that showed all
policymakers voted against further asset purchases to stimulate
the economy.
    The market was keen to know whether new Bank of England 
Governor Mark Carney voted in favour of increasing the Bank's
375 billion pounds ($567.09 billion) of asset purchases. The
minutes surprised investors as those policymakers, who had
previously supported more bond purchases, also voted against a
resumption. 
    "The minutes suggest a diminishing appetite for quantitative
easing and more appetite for other measures. The most obvious
suggestion is that Carney has convinced the dovish minority that
more aggressive forward guidance is warranted," Guy Foster, head
of portfolio strategy at Brewin Dolphin, said.
    "Expectations to this end will build as we approach the
August meeting and inflation report. It now looks like some form
of explicit guidance on interest rates may be announced."
    The BoE's minutes prompted cautious trading ahead of
congressional testimony later in the day from U.S. Federal
Reserve chief Ben Bernanke. His speech will be scrutinised for
hints about the timing of a reduction in economic stimulus
measures.
    
    Financials were the top decliners, with the UK banking index
 falling 0.3 percent and Royal Bank of Scotland
 dropping 1.7 percent.
    The weakness in banks put pressure on the blue-chip FTSE 100
index, which was down 23.08 points, or 0.4 percent, at
6,533.27 by 1025 GMT after opening higher.
    But strength in mining companies limited losses. The UK
mining index was up 0.7 percent, led by mining
stocks after BHP Billiton said its iron ore production
rose 9 percent to a record level. BHP shares were up 1 percent.
    "Quarterly production updates from BHP and Fresnillo are
having a knock-on effect on the sector," Tom Robertson, senior
trader at Accendo Markets, said. 
    BHP said it was ahead of plans to expand its iron ore
operations in Australia. The news was in line with an update
from Mexico's Fresnillo, the world's largest primary
silver producer, which said the metal output was in line with
guidance. Fresnillo was up 2.4 percent. 

($1 = 0.6613 British pounds)

 (Editing by Jane Merriman)

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