Midday Market: FTSE pulled back on profit-taking

The FTSE 100 traded 21 points lower at 5,376 as investors locked in gains on banking stocks and waited for more potentially downbeat economic news from the US.

The FTSE 100 was lower in midday deals as investors locked in profits in the banking sector after strong gains yesterday.

The index of Britain's largest listed companies traded 21 points lower at 5,376.

Joshua Raymond, market strategist at City Index, said investors are 'taking a bit of a pause for breath today having seen high stock demand push indices across Europe over 2% yesterday.'

Today the UK purchasing managers survey showed a sharp slowdown in construction in July, adding to concern that the sharp jump in construction reported in the UK's preliminary second quarter GDP reading was a blip rather than a sign of ongoing strength.

But the pound gained another cent higher against the dollar at $1.5946 ahead of a glut of US data this afternoon - recent economic numbers in the US have disappointed.

Michael Hewson, analyst at CMC Markets, said: 'If today’s US economic data continues to disappoint then we could well see further US dollar declines.'

June personal consumption data and pending home sales are expected to show a rise while factory orders are expected to have ticked lower.

In UK company news, Investec shares led the fallers, down 27.3p to 476.2p, after it placed 22 million shares to help shore up its balance sheet.

British Gas owner Centrica topped the risers, up 6.7p at 317.6p, after a bullish note from Goldman Sachs.

Among miners, Xstrata and Fresnillo were both higher after their trading updates. Their shares rose 9p to £10.67 and 4p at £10.79 respectively.

On the second line, house builder Taylor Wimpey stormed 2.6p higher to 31.1p after reporting it had made a profit and had cut building costs by 9%.

GKN - which makes parts for cars and planes - moved 4.9p to 141.5p after saying it will resume dividend payments following a return to profitability in the first half.