THE FTSE 100 Index was dragged into negative territory yesterday as insurance and mining stocks weighed heavy on the market.

An early rise on Wall Street in another day of gains after the Federal Reserve’s upbeat outlook on the economy failed to provide a boost for London stocks.

The Footsie closed down 27.4 at 4252.6 after a lacklustre session, clawing back some of the 1.2 per cent rise seen on Wednesday.

The US central bank had sparked advances for the Dow Jones Industrial Average after it said the world’s largest economy was shrinking at a slower pace, while also signalling it was in no hurry to raise interest rates.

But in London yesterday, attention was again focused on the mining sector after commodity prices came under fresh pressure, leaving Lonmin down 27p at 1187p, BHP Billiton off 30p at 1365p and Vedanta Resources 26p lower at 1314p.

Insurers were also heading south after Prudential fell 10½p to 406¼p, Aviva dropped 6¾p to 327¼p and Friends Provident declined 0.7p to 66.2p by the close of business.

Other heavyweights under pressure included Vodafone, which dropped 1.55p to 117.1p and Glaxo- SmithKline after a fall of 26½p to 1080½p.

One of the biggest gains of the session came from Royal Bank of Scotland, up 1.19p to 36¾p, after Cazenove upgraded the stock and said the company’s new management team was on the right path. The rest of the sector struggled for direction, with HSBC down 12.65p at 505½p and Lloyds Banking Group off 1.07p at 66½p.

Standard Chartered fell 28p to close at 1167p after it reported strong trading in the first five months of the year, but said it remained cautious about prospects.