* BoE leaves UK rates unchanged, keeps QE at 200 bln stg
* Vodafone weak, impacted by Verizon
* Miners fall; copper prices retreat
* Sainsbury higher, update above forecasts
By Tricia Wright
LONDON, Jan 7 (Reuters) - Britain's top share index fell in
midday trade on Thursday, pressured by index heavyweight
Vodafone <VOD.L> and mining stocks as investors digested the
Bank of England's decision to leave interest rates unchanged.
At 1221 GMT, the FTSE 100 index <> was down 10.55
points, or 0.2 percent, at 5,519.49, slipping back after closing
0.1 percent higher on Wednesday at a fresh 16-month high.
The Bank of England (BoE) kept the scale of its asset
purchase programme unchanged at 200 billion pounds ($319
billion) and left UK interest rates at 0.5 percent.
[]
Sterling was steady against the dollar and euro after the
BoE kept its monetary policy steady.
"(It was) very much as expected. The real test will be next
month when we have an inflation report and they will have to
make a decision on whether or not to extend QE []," said Rob Griffiths, strategist at Cazenove.
Vodafone was the heaviest drag on the blue-chip index, off
2.2 percent, with downbeat comments from its U.S. mobiles
business partner Verizon Communications <VZ.N> one factor
hitting the mobile phone giant. []
Verizon Chief Executive Ivan Seidenberg said on Wednesday
Verizon's profit fell more than analysts expected in 2009.
Miners were also under pressure, retreating after gains on
Wednesday, with copper prices falling back after touching a
16-month peak as investors fretted over possible tighter
monetary policy in China, the world's top metals consumer.
Xstrata <XTA.L>, Antofagasta <ANTO.L> and BHP Billiton
<BLT.L> dropped 0.5 to 1.1 percent, while Eurasian Natural
Resources <ENRC.L> lost 1.4 percent, hit by a downgrade in
rating from Cazenove to "underperform" in a sector review.
Weakness was also seen among banks, with Royal Bank of
Scotland <RBS.L>, a big gainer over the past few sessions, off
2.4 percent, while Standard Chartered <STAN.L> and HSBC <HSBA.L>
fell 1.6 and 1 percent.
Negative comment from Keefe, Bruyette & Woods weighed, with
the broker cutting its rating on the European banking sector to
"neutral", citing jitters about central bank QE exit strategies
and restrictive banking regulation proposals.
DEFENSIVES LIMIT LOSSES
Gains were seen among defensive stocks, helping to limit the
FTSE 100's losses.
Among pharmaceutical stocks, AstraZeneca <AZN.L> rose 1.2
percent after the firm settled a U.S. patent row over Nexium
with Israel's Teva Pharmaceuticals <TEVA.TA>, protecting the
Anglo-Swedish drugmaker's top-selling heartburn drug from
immediate generic competition. []
Peer GlaxoSmithKline <GSK.L> rose 0.4 percent.
Tobacco issues were higher, with British American Tobacco
<BATS.L> up 1 percent, buoyed by a JPMorgan target price hike,
and an upgrade to "buy" from Nomura on Wednesday. Imperial
Tobacco <IMT.L> also put on 1 percent.
Drinks firms were also in demand, with Diageo <DGE.L> and
SABMiller <SAB.L> up 1.2 and 1.1 percent.
Buyers came in for food retailers after J Sainsbury <SBRY.L>
delivered a better-than-expected third-quarter trading update.
Its shares climbed 2.2 percent. []
Peers Tesco <TSCO.L> and WM Morrison <MRW.L> gained 0.4 and
2.1 percent, respectively.
Plumbing supplies group Wolseley <WOS.L> was up 2.7 percent,
extending Wednesday's advance with a further percent rise
boosted by an UBS upgrade to "buy" from "neutral".
With the UK rate decision out of the way, investors will
shift their attention across the Atlantic, to Friday's U.S.
non-farm payrolls.
The only important U.S. data set for release later in
Thursday's session will be the latest weekly jobless claims
data.
(Editing by Rupert Winchester)
