Capita wins the battle, but not yet the war Logica fell 3½ to 80.3p, while Serco fell before recovering to close up 3 at 534½p after it said it had won a contract to run a contact centre in Sheffield. The FTSE 100 opened down, following the decision by ratings agency Moody's to put the UK on negative outlook, announced after markets closed on Monday. It edged into the black by late morning, buoyed by investor confidence in data from Germany well ahead of forecasts. However US retail sales data, which showed lower-than-expected growth in January, knocked confidence again and the blue-chip index closed down 5.83 at 5,899.87. Chris Beauchamp, Market Analyst at IG Index, couldn't resist a Valentine's Day reference or three. "On this most romantic of days, there is a clear lack of love between the FTSE and the 5900 mark, as the market ends its brief sojourn above this level and drops lower once again," he wrote. It is looking as if all the wooing in the world will not succeed in pushing the FTSE higher from here, and growing skittishness regarding the rally suggests that a major turn in sentiment might well be on its way. The general lack of upward progress seen in the past week raises the possibility that enthusiasm for this rally is wilting faster than a bouquet of flowers bought from a roadside petrol station. The FTSE 250 also dropped back, down 29.91 at 11,245.69. Banks and miners fell, reversing the relief rally on Monday after the Greek austerity deal. The 83pc-taxpayer-owned Royal Bank of Scotland shed 1.45 to 26.65p - the biggest large-cap faller. Lloyds Banking Group fell 1.01 to 34.29p. Barclays closed down 2.05 at 234.9p, having enjoyed a brief rally to hit 240.8p, after a slew of positive analyst notes. BNP Paribas raised the banking group to "outperform" from "neutral," while UBS raised its price target to 240p from 199p, and Shore Capital upgraded it to "hold" from "sell." Leading the commodity groups down was Rio Tinto, which lost 118p to £37.27½ as investors were underwhelmed by news that it had approved a $4.5bn expansion of the huge Chilean Escondida copper mine with BHP Billiton. BHP Billiton fell 10½p to £20.72. InterContinental Hotels fell 30p to £13.72 despite a strong trading update, on analyst suggestions it was overpriced. The lure of stable returns from the water sector proved itself once again, with United Utilities up 7½ at 605p and Pennon Group also rising, up 11 to 697½p, despite a mixed trading update. The owner of South West Water and waste management company Viridor said that a drop in prices for recyclate - recovered metals - was likely to knock its full-year profits. "Viridor has experienced a reduction in recyclate prices over the winter months reflecting world economic conditions," it said. Pennon also reported an increase in bid costs, due to a "higher level of activity... associated with its growing pipeline of long-term projects." Performance was on track, it said, and South West Water was still performing strongly. Liberum Capital's analysts were bullish on what they described as "the best growth story in utilities." "We see the potential for a near 100pc total return over four years," they wrote, pointing out Pennon had already flagged the likely weakening of Viridor profits in its November trading update. "We believe that previous market concerns over recyclate prices are overdone - prices have stabilised, and even bounced, in the past couple of months," they wrote. Market rumours were behind two of the biggest mid-cap rises. Misys, the financial-software maker merging with Temenos, rose 18.1 to 308.4p on speculation it had attracted interest from buy-out firms. Carpetright jumped 26 to 604p on reports its founder, Lord Harris, was considering taking the floor-coverings retailer private at a price of 700p a share. Bunzl, the world's largest distributor of disposable tableware and food packaging, topped the FTSE 100 leader board on the back of a JP Morgan upgrade to "overweight" from "neutral." Despite risks in the UK due to the "weak macro backdrop" and exposure to cyclical sectors, JP Morgan analysts were impressed by Bunzl's North American business. It had proved the most defensive of divisions, they said, helped by an 85pc exposure to grocery and food retail. "To a degree we think the business is counter-cyclical as during recessions people eat at home more than in restaurants," they wrote. This may lead to more supermarket sales of Bunzl- supplied products such as pizza boxes and roast chicken holders. Investors tucked in, sending shares up 32½ to 910½p. Another packaging company doing well was Mondi, among the biggest mid-cap risers. Also Europe's largest maker of office paper, Mondi rose 30 to 566p after saying 2011 profits would be considerably higher than in 2010. Not all paper did so well, however - at least not in the form of Yellow Pages directories. Another poor trading update from publisher Yell Group sent the shares down 1.03 -17.5pc- to 4.87p.