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FTSE lower as Finance ministers meet

Monday, July 09 09:32:54

Britain's top shares were weak in early trade today, led by falls in risk-sensitive commodity stocks and banks on global growth worries after weak U.S. jobs data, and ahead of the start of the Q2 earnings season. At 0713 GMT, the FTSE 100 index was down 24.70 points, or 0.4 percent, at 5,637.93, having lost 0.5 percent on Friday when investors cashed in on gains of 3.6 percent over the previous five sessions after the unexpectedly soft U.S. jobs data. Early volume for the UK blue chips was low, however, at around 8 percent of the 90-day daily average.

"We kick off (the) week in a rather subdued mood as low summer volumes truly kick in and the remaining investors are finding it increasingly difficult to source inspiration," said Mike McCudden, Head of Derivatives at Interactive Investor. Friday's U.S. jobs report knocked confidence in the recovery of the world's biggest economy, although it could raise hopes for a further easing in monetary policy by the Federal Reserve. Chicago Federal Reserve Bank President Charles Evans, one of the Fed's most dovish policymakers, said in remarks prepared for delivery to the Sasin Bangkok Forum on Monday that U.S. policymakers should unleash a new round of bond purchases to bring down unemployment, even at the risk of driving inflation temporarily higher. Meanwhile, China's annual consumer inflation cooled more than expected to 2.2 percent in June, from 3.0 percent in May, data showed on Monday, giving Beijing more scope to ease monetary policy to support growth without stoking upward price pressures.

The country's central bank unexpectedly cut benchmark interest rates last week for the second time in a month in a bid to bolster growth. "With Chinese inflation data coming in much lower than expected investors believe the government has the firepower to embark on a sizeable stimulus programme which may provide global markets a boost. Indeed, on low volumes, any such move to boost growth in China should propel equities higher," Interactive Investors' McCudden added. ( C ) Reuters