FTSE drifts higher as banks, energy gain

* FTSE 100 up 0.2 percent
* Banks, energy stocks, defensives gain ground

* Miners weaker, tracking lower metal prices

By Simon Falush

LONDON, Feb 24 (BestGrowthStock) – Britain’s top share index gained
0.2 percent in quiet early trade on Wednesday, as firmer crude
prices pushed up energy stocks while banks and some defensives
were modestly higher, offsetting weakness among miners.

By 0853 GMT, the FTSE 100 (.FTSE: ) was 8.47 points higher at
5,323.56 after it closed 0.7 percent lower the previous session.

Stocks on Wall Street (.DJI: ) ended 1.0 percent lower on
Tuesday after U.S. consumer confidence fell in February to its
lowest level in 10 months, and Asian equity markets fell back in
response on Wednesday.

But investors in Britain’s blue-chip index were reluctant to
take big positions ahead of a congressional testimony by Federal
Reserve Chairman Ben Bernanke to be delivered to the House of
Representatives and the Senate on Wednesday and Thursday,
respectively.

After the surprise increase last week in the discount rate
the Fed charges banks for emergency loans, the market will focus
on how Bernanke explains the move. [ID:nN1983326]

Investors in the UK were also looking ahead to results from
Royal Bank of Scotland (RBS.L: ) on Thursday and Lloyds Banking
Group (LLOY.L: ) on Friday for more evidence of the health of the
financial system.

“We are waiting for results from RBS and Lloyds and for
Bernanke comments, and until those things come out we are going
to drift,” said David Battersby, investment manager at
Redmayne-Bentley in Leeds.

Ahead of the results, banks were generally firmer. HSBC
(HSBA.L: ), Standard Chartered (STAN.L: ), Royal Bank of Scotland
(RBS.L: ) and Lloyds Banking Group (LLOY.L: )gained 0.1 to 1.2
percent but Barclays (BARC.L: ) fell 0.4 percent as it traded
ex-dividend.

Energy stocks were the biggest support for the index as
crude prices steadied above $79 per barrel (CLc1: ).

BG Group (BG.L: ), BP (BP.L: ), Royal Dutch Shell (RDSa.L: ),
Tullow Oil (TLW.L: ) and Cairn Energy (CNE.L: ) gained 0.3-0.6
percent.

With a high level of uncertainty in the market, defensive
stocks performed relatively well. Imperial Tobacco (IMT.L: ),
medical supplies group Smith & Nephew (SN.L: ) and BT Group (BT.L: )
added 0.2 to 1.0 percent.

Miners were a drag on the index as some metal prices
weakened slightly, with BHP Billiton (BLT.L: ), Rio Tinto (RIO.L: )
and Randgold (RRS.L: ) losing 0.4 to 0.8 percent.

The sector was also unsettled by news that major commodity
consumer China could implement fresh measures to clamp down on
excessive bank lending to temper its growth spurt.

China’s banking regulator has told commercial lenders to
restrict new loans to local governments’ financing arms to ward
off potential risks of default, state media reported, the latest
step by Beijing to rein in galloping credit expansion.
[ID:nTOE61M098]

No major domestic economic data is due for release on
Wednesday, so January U.S. new home sales numbers, due at 1500
GMT, will be the main macro focus, with a figure of 0.36 million
expected, up from 0.342 million in December.

Overall ex-dividend factors knocked 4.23 points off the FTSE
100 index on Wednesday, with Land Securities (LAND.L: ), Randgold
Resources (RRS.L: ), Reckitt Benckiser (RB.L: ), and Rio Tinto
(RIO.L: ) all losing their dividend attractions in addition to
Barclays.

Stock Market Advice

(Reporting by Simon Falush; Editing by Hans Peters)

FTSE drifts higher as banks, energy gain