Defensives lift FTSE; BA, retailers hit by snow

* FTSE 100 rises 0.5 percent

* Utility stocks gain on defensive attractions

* BA, retailers knocked by freezing weather

By Tricia Wright

LONDON, Dec 20 (BestGrowthStock) – Britain’s top share index rose on
Monday, boosted by defensive utility stocks, while snow and
freezing temperatures hurt British Airways (BAY.L: ) and
retailers, led down by Next (NXT.L: ).

By 1207 GMT, the FTSE 100 (.FTSE: ) was up 31.07 points, or
0.5 percent, at 5,902.82, although trade was light as the market
wound down for the Christmas holiday at the end of the week.

“It’s all weather related really… Next and BA are getting
hit by a pretty poor weekend. BA have had to cancel flights,”
Phil Gillett, a trader at Spreadex, said.

Next was among the top the blue-chip fallers, down 1.6
percent, on concerns over the impact of Arctic conditions on the
high street on the last weekend before Christmas.

Downbeat comment from H20 Markets also hurt Next, with the
CFD specialists repeating a “sell” rating on the retailer.

Marks & Spencer (MKS.L: ) and Tesco (TSCO.L: ) shed 1.4 percent
and 0.2 percent respectively, while mid caps Debenhams (DEB.L: )
and Dixons Retail (DXNS.L: ) fell 2.4 percent and 4.4 percent.

British Airways (BAY.L: ) dropped 1 percent as the airline
said the severe weather continued to cause significant
disruption to its operations and more travel chaos was possible,
with forecasts of more snow.

But energy stocks (.FTNMX0530: ) found favour as likely
freezing temperatures in Europe and the U.S. Northeast this week
looked set to boost heating fuel demand.

CHRISTMAS SPIRIT

Diageo (DGE.L: ) rose 1.8 percent as investors bet on stocks
perceived as better able to endure harsh economic conditions,
and as UniCredit lifted its rating on the drinks company to
“buy” from “hold”, saying the spirits sector could benefit from
the rapid growth in wealthy consumers in emerging markets.

Buyers also came in for utilities on the back of their
defensive attractions, and with Scottish & Southern Energy
(SSE.L: ), up 1.1 percent, aided by persistent vague talk of a
possible bid for the company.

National Grid (NG.L: ) climbed 1.7 percent, while Severn Trent
(SVT.L: ) advanced 1.4 percent.

“The view seems to be that there’s very little upside to be
had at this point in time generally from the market, and the
utility stocks have had a poor run recently,” Manoj Ladwa,
senior trader at ETX Capital, said.

“Going into next year when things could become a lot more
difficult for the economy, utility stocks would be the sector of
choice,” he said.

Positive broker sentiment buoyed InterContinental Hotels
(IHG.L: ), up 1.1 percent, with Numis Securities upgrading its
rating for the stock to “buy” from “add”, saying the outlook for
the hotel industry is improving.

U.S. stock index futures (SPc1: ) (DJc1: ) (NDc1: ) pointed to a
higher opening on Wall Street on Monday, ahead of November’s
Chicago Fed index, scheduled for release at 1330 GMT.

(Editing by David Cowell)

Defensives lift FTSE; BA, retailers hit by snow