The FTSE 100 ended six days of gains this morning by going into reverse as investors took profits.

Mining stocks, which had led the recovery, were the worst hit. Vedanta Resources was the heaviest faller, down 102.5p to 897p, after analysts at Morgan Stanley cut their rating on the stock to equalweight from overweight, citing its gearing to the commodity cycle.

The broker said it was now anticipating a very weak first half of 2009 with global demand growth close to zero in all commodities.

It subsequently cut its price targets on a string of miners, including Kazakhmys, down 27.5p to 369.75p, Xstrata, down 94p to £12.10, and Eurasian Natural Resources, down 32p to 376p.

Overall, the FTSE 100 fell almost 2 per cent, down 91.25 points to 4548.25, in line with other European stock markets, despite expectations of a UK interest rate cut tomorrow, which had fuelled the index in the past two sessions.

Old Mutual fell 3p to 56p after Morgan Stanley downgraded the insurer to equal weight, saying its guarantee issues in the US and Bermuda operations overshadowed its strong cashflow generation.

Rolls-Royce lost 13.75p to 327.25p after analysts at UBS cut their price target on the stock to 280p from 300p based on a belief that it will struggle to boost its revenues in 2009 and 2010 and the weakness of the aircraft financing market will force it to spend about £200 million on customer financing in the next three years.

Firstgroup, the bus and rail group, led the index, up 26.25p to 471.5p, after saying trading in its second half had started well and was in line with expectations. The group’s first-half results also gave Stagecoach a boost, up 10.5p to 194.7p.

Shares in Next, up 41p to £11.66, also made ground after the retailer reported better-than-expected third-quarter numbers.

In the FTSE 250, Carillion rose 15.75p to 241p after it said a joint venture has been selected for contracts worth £600 million during a visit by Gordon Brown to the UAE.

Redrow dropped 16.25p to 195p after the housebuilder gave warning of further gloom in the UK housing sector. Its caution also hit Persimmon, down 23.5p to 328.25p.

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