FTSE flat; banks, pharmas offset gains in commods

Reuters: [2008-05-06 18:15:00]

By Dominic Lau

LONDON, May 6 (Reuters) - Britain's top share index ended flat on Tuesday as gloom in banks and pharmaceuticals offset gains in miners and oil shares which rode on the coat-tail of higher commodity prices.

The FTSE 100 <.FTSE> closed down 0.3 points at 6,215.2, well off its day's low of 6,155.9. The UK's blue-chip index advanced nearly 7 percent last month -- its best monthly performance in five years, but is still down 3.7 percent for the year.

"The first thing we are looking for in terms of future gains is a period of consolidation for major indexes up at these kind of levels," Tim Hughes, head of sales trading at IG Index, said.

"If this can be achieved, if the gains aren't given back on the back of downbeat sentiment in the financial sector for instance, then you would imagine equity markets are going to a better place looking forwards," he said.

"A lot continues to depend on whether there are more shocks to come from big banks."

Banks shaved 10 points off the FTSE 100 on concerns of further problems in the sector amid a global credit crisis.

Lloyds TSB <LLOY.L> shed 3 percent after its steady trading update and reassurance over capital strength was overshadowed by wider concerns for the banking sector and writedowns.

Swiss bank UBS <UBSN.VX> axed 5,500 jobs and sold billions of dollars of ailing assets in a bid to break free from the subprime crisis. [ID:nL06313489]

Barclays <BARC.L>, Royal Bank of Scotland <RBS.L>, HSBC <HSBA.L> and Alliance & Leicester <ALLL.L> were down between 0.1 and 1.5 percent.

The Bank of England will announce its interest-rate verdict on Thursday.

Drugmakers also took a beating, with Shire <SHP.L> losing 4.6 percent. Credit Suisse said Shire's biggest hope, Vyvanse, a medicine for attention deficit hyperactivity disorder, was not capturing as big a market share as expected according to weekly IMS data.

AstraZeneca <AZN.L> dropped 2 percent after saying a European patent covering the use of its Symbicort medicine as a treatment for chronic obstructive pulmonary disease (COPD) had been revoked.

GlaxoSmithKline <GSK.L> was also down 2 percent. The company planned to sell a $6 billion, three-tranche bond, one of the banks managing the sale said.

TULLOW MAKES DISCOVERY

Tullow Oil <TLW.L> spurted some 24 percent after the explorer said its well offshore of Ghana had hit a significant column of light oil, indicating its Jubilee field is bigger than thought. [ID:nL06900257]

Elsewhere in the sector, Cairn Energy <CNE.L> put on 4.9 percent, BG Group <BG.L> added 7.1 percent and heavyweight Royal Dutch Shell <RDSa.L> rose 0.8 percent.

Miners were the another standout performers, with Rio Tinto <RIO.L>, BHP Billiton <BLT.L>, Vedanta Resources <VED.L>, Kazakhmys <KAZ.L> and Xstrata <XTA.L> up 2.7 to 4.9 percent.

Capita Group <CPI.L> strengthened 3.3 percent. Britain's biggest back-office outsourcing firm said it had performed strongly in the first four months of 2008 and revenue growth across the group was very encouraging.

Property counters suffered after Morgan Stanley issued a downbeat note on the sector.

The broker also cut its rating on British Land <BLND.L> to "underweight" from "overweight" and downgraded Land Securities to "underweight" from "equal weight", while trimming its price targets on Hammerson <HMSO.L> and Segro <SGRO.L>.

British Airways <BAY.L> lost nearly 4 percent after the airline said a decline in the number of economy-class travellers was largely behind a 7 percent decline in passenger figures in April.

Thomson Reuters <TRIL.L> fell 3.4 percent after a trader said Morgan Stanley had placed 2.6 million shares in the company at between 15.15 and 15.25 pounds per share. Morgan Stanley declined to comment. (Additional reporting by Rebekah Curtis and Michael Taylor; Editing by David Hulmes) ((dominic.lau@reuters.com; +44 20 7542 5440; Reuters Messaging: dominic.lau.reuters.com@reuters.net))

     
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  Keywords: MARKETS BRITAIN STOCKS =2 
    

FTSE dips as downbeat banks offset Tullow oil find

Reuters: [2008-05-06 13:12:00]

    By Rebekah Curtis 
    LONDON, May 6 (Reuters) - Britain's FTSE 100 <.FTSE> gave up 
gains by mid-session on Tuesday, as banks tracked a weak 
sectoral performance across the Atlantic, while explorer Tullow 
Oil <TLW.L> rocketed after a significant oil find. 
    By 1035 GMT, the FTSE 100 was down 34.4 points, or 0.6 
percent, at 6,181.1 as shares fell across Europe and U.S. stocks 
looked set for another red session. 
    Wall Street dropped sharply on Monday on investors' worries 
that Bank of America Corp <BAC.N> may walk away from buying 
troubled lender Countrywide Financial Corp <CFC.N>, while record 
oil prices above $120 a barrel increased worries about the 
effect of this on consumer spending. 
    Asian stocks also fell, while the Japanese stock market was 
closed for a national holiday.  
    All UK banks fell and together stole about 15 points from 
the index, with Lloyds TSB <LLOY.L> off 3.8 percent, Alliance & 
Leicester <ALLL.L> down 2.5 percent and Barclays <BARC.L> 
shedding 1.6 percent. 
    "People are a little bit worried about the underlying 
performance of the UK economy going forward," said Neil Parker, 
an economist at Royal Bank of Scotland.  
    UK markets were closed on Monday for a national holiday. 
    The banking sector was further demoralised by Swiss bank UBS 
<UBSN.VX> unveiling hefty job cuts. 
    Investors were also wary ahead of the Bank of England's 
interest-rate verdict on Thursday, with the central bank widely 
expected to hold borrowing costs. 
    "Eventually the decision to cut interest rates further will 
come, but anybody who's expecting it to come in the near term 
will be disappointed," Parker said. 
 
    TULLOW STRIKE 
    Among gainers, Tullow Oil surged more than 20 percent after 
saying its Mahogany-2 well offshore of Ghana hit a significant 
column of light oil, indicating its Jubilee field is bigger than 
thought. [ID:nL06900257] 
    Tullow gained extra momentum after Goldman Sachs and ABN 
AMRO raised their price targets on the stock, while Cazenove 
upgraded the shares to "in line" from "underperform". 
    Oil majors Royal Dutch Shell <RDSa.L> and BP <BP.L> gave up 
gains, however, as U.S. crude oil prices nudged lower from 
record levels. 
    BG Group <BG.L> put on 2.9 percent after HSBC raised its 
price target on the stock. 
    Miners gained on stronger gold and copper prices, with 
Kazakhmys <KAZ.L> up 3.2 percent and Vedanta Resources <VED.L> 
gaining 2.7 percent. 
    BHP Billiton <BLT.L> added 2.1 percent. Its Chief Executive 
Marius Kloppers is to go on the offensive once more in the 
takeover battle with Rio Tinto <RIO.L>, the Financial Times 
reported. Rio rose 2.4 percent. 
    Leading the midcaps index <.FTMC>, British market research 
firm Taylor Nelson Sofres (TNS) <TNS.L> jumped 11.6 percent 
after advertising group WPP Plc <WPP.L> urged the firm to engage 
in talks over a possible offer. 
    TNS said on Sunday it had rejected a 230 pence-a-share, or 
950 million pound ($1.9 billion), offer from WPP, saying it 
preferred to press ahead with talks on a nil-premium merger with 
Germany's Gfk <GFKG.DE>. [ID:nL06625392] 
    EasyJet <EZJ.L> shed 7.3 percent after Deutsche Bank 
downgraded the stock and said airlines are not doing enough to 
protect themselves from the impact of rising oil prices. British 
Airways <BAY.L> dropped 3.7 percent. 
    Property shares lagged after Morgan Stanley downgraded the 
European sector to "cautious" for a period expected to last 
until around the end of 2009.  
    The bank said UK property shares had only performed in line 
with the UK market this year and have significantly 
underperformed continental European property shares. 
    It downgraded three UK property stocks: Land Securities 
<LAND.L>, British Land <BLND.L> and Brixton <BXTN.L>, all of 
which traded in the red. 
 (Additional reporting by Michael Taylor; Editing by David 
Hulmes) 
 ((rebekah.curtis@reuters.com; +44 20 7542 4365; Reuters 
Messaging: rebekah.curtis.reuters.com@reuters.net)) 
  Keywords: MARKETS BRITAIN STOCKS  
    
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 Market digest:      <.AD.L>          Top 10 by vol:     <.AV.L> 
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  Keywords: MARKETS BRITAIN STOCKS=2 
    

FTSE edges up as Tullow leaps on Ghana oil strike

Reuters: [2008-05-06 10:22:00]

    By Rebekah Curtis 
    LONDON, May 6 (Reuters) - Britain's FTSE 100 <.FTSE> edged 
up on Tuesday as Tullow Oil <TLW.L> leapt after striking oil in 
Ghana, but banks weighed after the sector took a overnight 
beating on Wall Street. 
    By 0807 GMT the FTSE 100 was up 0.15 percent at 6217.2. 
Shares in the wider European market traded flat. 
    "Most expectations for this morning were that we'd be about 
30 points down, so it's not a bad performance," said Edward 
Menashy, an economist at Charles Stanley. 
    "If we started off on a positive note today, I think we can 
continue that for the rest of the week." 
    UK-based oil explorer Tullow surged 16.5 percent after 
saying its Mahogany-2 well off the coast of Ghana had hit a 
significant column of light oil, indicating that its Jubilee 
field is larger than earlier thought. [ID:nL06715434] 
    Cazenove raised its rating on the stock to "in line" from 
"underperform." 
    Oil majors Royal Dutch Shell <RDSa.L> and BP <BP.L> also 
rose. BG Group <BG.L> put on 2 percent after HSBC raised its 
price target on the stock. 
    U.S. stocks fell on Monday on worry that Bank of America 
Corp <BAC.N> may walk away from buying troubled lender 
Countrywide Financial Corp <CFC.N>, while record oil prices 
above $120 a barrel increased worry about consumer spending. 
    Asian stocks also fell, and the Japanese stock market was 
closed for a national holiday.  
     
    BANKS LAG 
    UK banks weighed on the FTSE, following the sector's 
overnight fall on Wall Street. Alliance & Leicester <ALLL.L> was 
off 1.5 percent, Standard Chartered <STAN.L> fell 1.4 percent 
and Lloyds TSB <LLOY.L> was down 0.9 percent. 
    Investors were also hesitant ahead of a key interest rate 
decision from the Bank of England on Thursday, with economists 
expecting the central bank to keep rates on hold. 
    Miners gained on stronger gold and copper prices, however, 
with Vedanta Resources <VED.L> gaining 3.3 percent and Anglo 
American <AAL.L> up 1.7 percent. 
    BHP Billiton <BLT.L> added 2 percent. Its Chief Executive 
Marius Kloppers is to go on the offensive once more in the 
takeover battle with Rio Tinto <RIO.L>, the Financial Times 
reported. Rio rose 3 percent. 
    Among midcaps, British market research firm Taylor Nelson 
Sofres <TNS.L> jumped 11.5 percent after saying it had rejected 
an unsolicited proposal from advertising group WPP <WPP.L> to 
buy it for 950 million pounds ($1.87 billion). WPP lost 0.6 
percent. 
    British housebuilder Bovis Homes <BVS.L> dropped 4.2 percent 
after saying its results for the first half of the year will be 
significantly lower than it had previously anticipated. It said 
conditions in the housing market had deteriorated sharply and 
the outlook for the remainder of 2008 was difficult to predict. 
    Property shares lagged after Morgan Stanley downgraded the 
European property sector to "cautious" for a period expected to 
last until around the end of 2009. The bank said UK property 
shares had only performed in line with the UK market this year 
and have significantly underperformed continental European 
property shares. 
    It downgraded three UK property stocks: Land Securities 
<LAND.L>, British Land <BLND.L> and Brixton <BXTN.L>, all of 
which traded in the red. 
 (Editing by Richard Hubbard) 
 ((rebekah.curtis@reuters.com; +44 20 7542 4365; Reuters 
Messaging: rebekah.curtis.reuters.com@reuters.net)) 
  Keywords: MARKETS BRITAIN STOCKS 
    

FTSE up over 2% on US jobs data boost; banks lead

Reuters: [2008-05-02 18:20:00]

By Michael Taylor

LONDON, May 2 (Reuters) - Britain's FTSE 100 <.FTSE> ended over 2 percent higher on Friday as U.S. jobs data helped extend gains late in the session, with banks and mining shares leading the charge.

The UK's blue-chip index was up 128.2 points, or 2.1 percent at 6,215.5 -- its highest close since early January.

The market will close on Monday for a public holiday.

The U.S. government said 20,000 workers were lost from non-farm payrolls in April, against expectations for a fall of 80,000 and compared with a downward revised loss of 81,000 in March.

April still marked the fourth consecutive monthly contraction in the labour market, but the numbers suggested the world's largest economy was proving more resilient than expected.

Banks were the standout sector, with Royal Bank of Scotland, HBOS <HBOS.L>, Lloyds TSB <LLOY.L>, Alliance & Leicester <ALLL.L> and Barclays <BARC.L> rising between 2.4 to 6.6 percent.

In related news, private equity firm Texas Pacific Group is considering a bid for Royal Bank of Scotland's insurance arm, a source familiar with the matter said on Friday. The unit could be worth 8 billion pounds ($15.9 billion). [ID:nL02189861]

"You could feel the tension today before the U.S. non-farm payroll figures were released, as traders tried not to get too exposed," Ryan Kneale, an analyst at BetsForTraders.com said.

"The actual figures were much better than expected and the equities markets, which were already up 1 percent before the news, stepped up a gear and went into overdrive."

"This is great news for the market bulls, but essentially rules out any more rate easing by the Fed in the short term," he added.

Among other gainers on Friday, Rio Tinto <RIO.L>, which has rejected a bid from rival BHP Billiton <BLT.L>, climbed 4.6 percent after the company's Chairman Paul Skinner was quoted by the Sydney Morning Herald as saying that a break-up of Rio Tinto was an option to extract the best possible return for shareholders. [ID:nSYD107749]

BHP advanced 4.8 percent, while Kazakhmys <KAZ.L>, Lonmin <LMI.L>, Vedanta Resources <VED.L>, Xstrata <XTA.L> and Eurasian Natural Resources <ENRC.L> were up 3.4 to 5 percent.

Insurers were also in demand. The Financial Times said Germany's Allianz <ALVG.DE> could make a big acquisition in the UK general insurance market and was gearing up for a possible assault on UK life assurance by importing U.S.-style retirement savings products to Britain. Allianz was not immediately available for comment.

Aviva <AV.L>, Standard Life <SL.L>, Prudential <PRU.L>, Friends Provident <FP.L> and Admiral <ADML.L> were up 4.1 to 5.4 percent.

Retailers also supported the index, with Next <NXT.L> and Marks & Spencer <MKS.L> riding high on a bear squeeze, traders said.

Building materials distributor Wolseley <WOS.L>, which earns half of its revenue in North America, rebounded 8.3 percent after a recent battering.

Among companies on the downside, British Energy <BGY.L> lost 3.9 percent as traders began to doubt whether recent takeover speculation would result in a bidding war.

Global news and information company Thomson Reuters <TRI.TO> <TRIL.L> slipped 2.3 percent one day after its first earnings report as a combined company and as RBC cut its price target on the stock to $46 from $47 with an "outperform" rating.

Shares in Cadbury Plc <CBRY.L> were flat on their first day of trading as a stand-alone confectionery group.

"The (jobs) number was of course still negative but global stock markets in recent weeks appeared to have become resilient to this sort of news," said David Jones, chief market strategist at IG Index. "Which begs the question, were the falls at the beginning of the year overdone?"

"Many are starting to feel that stocks at least seem to be signalling the worst may be over... The jury is still out on this point."

(Additional reporting by Dominic Lau; editing by Rory Channing)

((michael.taylor@reuters.com; +44 207 542 0919; Reuters messaging: michael.taylor.reuters.com@reuters.net))

Keywords: MARKETS BRITAIN STOCKS

FTSE rises ahead of US jobs data; banks, miners up

Reuters: [2008-05-02 13:05:00]

By Michael Taylor

LONDON, May 2 (Reuters) - Britain's main share index rose almost 1 percent by midday on Friday, buoyed by banking and mining sectors, and volumes remained low ahead of U.S. jobs data.

At 1039 GMT, the FTSE 100 <.FTSE> was up 51.7 points, or 0.9 percent, at 6,139.0. The UK benchmark index gained 6.8 percent in April, its best monthly performance in five years.

Among gainers on Friday, Rio Tinto <RIO.L>, which has rejected a bid from rival BHP Billiton <BLT.L>, climbed 0.8 percent after the company's Chairman Paul Skinner was quoted by the Sydney Morning Herald as saying that a break-up of Rio Tinto was an option to extract the best possible return for shareholders. [ID:nSYD107749]

BHP advanced 1.2 percent, while Kazakhmys <KAZ.L>, Lonmin <LMI.L>, Vedanta Resources <VED.L>, Xstrata <XTA.L> and Eurasian Natural Resources <ENRC.L> were up 1.3 to 3.3 percent.

U.S. stocks rose overnight as a rebound in the dollar and retreating oil prices calmed fears about inflation. In Asia, Japan's Nikkei average <.N225> rose 2.1 percent.

Investors will focus on the U.S. non-farm payrolls data due at 1230 GMT for further clues on the state of the world's largest economy. Economists in a Reuters survey forecast 80,000 jobs were lost in April, a repeat of the March figure.

"We have to be quite cautious ahead of the non-farms," said Mark Priest, a senior trader at TradIndex. "Part of all this recession and concerns over the economy, employment is key factor and if they come in weaker or stronger than expected, we will see markets shoot one way or another."

Banks were another standout sector, with Royal Bank of Scotland, HBOS <HBOS.L>, Lloyds TSB <LLOY.L>, Alliance & Leicester <ALLL.L>, Standard Chartered <STAN.L> and Barclays <BARC.L> rising between 1 and 2.8 percent.

The Daily Telegraph said Texas Pacific Group was poised to bid for RBS' insurance arm. RBS said last month it would consider selling off all or part of its insurance arm as part of efforts to strengthen its capital ratios.

Insurers were also in demand. The Financial Times said Germany's Allianz <ALVG.DE> could make a big acquisition in the UK general insurance market and was gearing up for a possible assault on UK life assurance by importing U.S.-style retirement savings products to Britain. Allianz was not immediately available for comment.

Aviva <AV.L>, Standard Life <SL.L>, Prudential <PRU.L> and Friends Provident <FP.L> and Admiral <ADML.L> were up 2.3 to 4.1 percent.

Retailers also supported the index, with Next <NXT.L> and Marks & Spencer <MKS.L> riding high on a bear squeeze, traders said.

"The volumes aren't good. It's a long bank holiday weekend," said one London trader in retailers. "Whether we get a dose of reality with the payrolls this afternoon I don't know but there is a lack of volume here."

Building materials distributor Wolseley <WOS.L>, which earns half of its revenue in North America, rebounded 4.1 percent after a recent battering.

John Wood Group <WG.L> and British Energy <BGY.L>, however, were down.

Shares in Cadbury Plc <CBRY.L> fell 1 percent on their first day of trading as a standalone confectionery group, undermined by the prospects for its soon-to-be spun off North American Dr Pepper drinks arm. (Additional reporting by Dominic Lau; Editing by Erica Billingham) ((michael.taylor@reuters.com; +44 207 542 0919; Reuters messaging: michael.taylor.reuters.com@reuters.net))