FTSE 100 claws back early falls

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(Close): The FTSE 100 clawed back its early falls as gains in mining stocks outweighed losses among banks.

Lloyds shares fell more than 2% after it reported a fall in first-quarter profits, and ended the day down 1.6%

Pre-tax profits at Lloyds nearly halved to £654m after it took a £790m charge related to high income bonds.

The mining giant Anglo-American rose 8% after it said it had agreed the sale of its niobium and phosphates businesses to China Molybdenum for $1.5bn.

Tullow Oil was the best performer on the FTSE 100 rising 11% as the oil price hit new highs for 2016 for the third day in a row.

The Royal Bank of Scotland fell 4.4% after it said there was a "significant risk" that it would not meet the 2017 deadline to spin off the 316-branch Williams & Glyn business.

The day had started with falls in most European markets as investors reacted to the surprise decision from the Bank of Japan not to ease monetary policy further.

"The lack of action [from the Bank of Japan], perversely, proves that central bank stimulus still has the power to shock, both when it is tried and when it isn't," said Chris Beauchamp, senior market analyst at IG.

The FTSE 100 ended just 2.5 points higher at 6322.40.

On the currency markets, the pound edged up 0.4% against the dollar to $1.4597, and 0.25% against the euro to €1.2876.