By Kit Rees and Sudip Kar-Gupta
LONDON (Reuters) - Britain's top share index fell on Thursday after a drop in Lloyds (L:LLOY) pulled financial stocks lower, while global equities were dented by the Bank of Japan's unexpected move to snub further monetary stimulus.
The blue-chip FTSE 100 index (FTSE) was down 1.1 percent at 6,253.65 points. The index has been flat so far in 2016, but down 12 percent from a record high reached in April 2015.
Financial stocks were the biggest drag on the market, knocking more than 21 points off the FTSE 100 index, led lower by a 2.1 percent fall at Lloyds.
Lloyds posted underlying profits in line with expectations on Thursday, but some traders expressed disappointment at the bank's unveiling of a 790 million pound ($1.15 billion) charge in this quarter for buying back bonds.
"Overall, Lloyds' results looked in-line with forecasts, but there's a slight disappointment at that extra restructuring charge," said Jonathan Roy, advisory investment manager at Charles Hanover Investments.
Stocks going ex-dividend also weighed, with drops in companies including Legal & General (L:LGEN), Informa (L:INF), Merlin (L:MER) and Relx (L:REL) taking around 9 points off the index, as they traded without entitlement to their latest dividend payout.
The FTSE was also hit after global stock markets in general were impacted by the Bank of Japan's decision to hold off from expanding monetary stimulus on Thursday.
"Sentiment is very bearish towards the Japanese economy and expectations are mounting that another technical recession could be around the corner," said FXTM research analyst Lukman Otunuga, commenting on Japan.
Among the risers, however, the UK mining sector was up 1 percent, led higher by a 3.2 percent rise in Anglo American (L:AAL) after the miner agreed to sell its Brazilian niobium and phosphates businesses for $1.5 billion.
"The disposal will serve to cut debt and bolster the embattled miner’s balance sheet, much to investor glee, leaving it in a much stronger and leaner position both operationally and financially," Mike van Dulken, head of research at Accendo Markets, said in a note.