Britain's top shares fell on Wednesday, led by banks as worries over the economic recovery in the U.S. and lack of action taken by the Federal Reserve hit sentiment, offsetting gains in miners.
The FTSE 100 ended down 24.28 points or 0.4% at 5,551.91, after falling 0.5% on Tuesday.
The U.S. central bank's policy-setting panel opened the door wider late on Tuesday to pumping hundreds of billions of new dollars into the economy on worries over low inflation.
U.S. Treasury debt prices surged and the dollar fell sharply as investors speculated about further easing as soon as the Fed's next meeting on November 2-3.
Gold and base metal prices rallied as investors retreated from the dollar, fuelling demand for mining stocks, with precious metals miners Randgold Resources and African Barrick Gold up 2.9 and 2.5%, respectively.
"Whenever you think the market looks quite rosy look where gold is, it's still at its all time high, that paints a wide picture on how the sentiment is," Will Heddon, sales trader at IG Index, said.
"Everything has seemed good over the last few weeks but can it be when gold is that high?"
BHP Billiton was up 2.1%. Potash Corp said it filed a lawsuit against BHP Billiton that seeks to block the mining giant's $39 bln hostile bid for the Canadian fertilizer producer.
BANKS WANE
Banks, which tend to be sensitive to even slight shifts in risk appetite, were the biggest drag on the index, with Lloyds Banking Group off 1.4% and HSBC 1.0% weaker.
Banks were also weighed down by a statement from German peer Deutsche Bank, which blasted a warning shot over Q3 earnings late on Tuesday.
Santander, Europe's largest banking group by market capitalisation, fell after a Credit Suisse downgrade.
Minutes of the Bank of England's Monetary Policy Committee meeting on September 8-9 showed BoE policymaker Andrew Sentance had repeated his lone call for an interest rate hike while some of his colleagues thought the probability that more monetary easing would be needed had increased.
Weir Group dropped 3.1% after RBS cut its rating on the stock to "hold" from "buy" on valuation grounds.
Aviva was down 4.8% as it traded ex-dividend on Wednesday, with Aggreko and Petrofac also losing their payout attractions.
Autonomy and Invensys were each off 3.3%, weighed by weakness in U.S. peers.
With the market hemmed in a fairly tight range, investors were also eying technical levels.
"(There is) support around 5,505/10, the lows of the last week or so, while below that there should also be some interest around 5,435 which was the old 61.8% retracement level of the down move from the highs to the lows of this year," said Michael Hewson market analyst at CMC Markets.
He added that the index needs to consolidate itself above 5,600 to re-target the 5,800 highs.
