FTSE slips; weak banks, oils counter firm miners

By David Brett

LONDON (BestGrowthStock) – Britain’s top share index eased on Wednesday as investors paused for breath after six days of gains, with falls in banks and oils countering strength in miners amidst robust production reports.

By 0915 GMT (5:15 a.m. EDT), the FTSE 100 (.FTSE: ) was down 3.98 points, or 0.1 percent, at 5,267.04, slipping back having hit its highest close in over two weeks on Tuesday and after rallying more than 9.5 percent since the index hit its 2010 low on July 1.

Miners were the biggest gainers on the FTSE 100, helped by production updates from Fresnillo (FRES.L: ) and Rio Tinto (RIO.L: ) which built on the bullish sentiment seen with earnings numbers from U.S. metals group Alcoa (AA.N: ) late on Monday.

Precious metals miner Fresnillo, up 1.8 percent, said its gold production rose to a record in the second quarter and it was on track to meet it 2010 output targets.

Diversified miner Rio Tinto (RIO.L: ) added 1.2 percent after its second-quarter update, but gains in the sector remained tempered ahead of industrial output data from China, due out on Thursday, with fears they might fall short of expectations.

“We are momentum trading again driven on absolutely ridiculously low volumes … but I don’t think there is any doubt that … (we have) corporate news and results that are good because companies are mean and lean and making profits,” said David Buik, senior partner at BGC partners.

Tech stocks got a boost after the world’s top chipmaker, Intel (INTC.O: ), posted forecast-beating second-quarter results and gave a stronger-than-forecast third-quarter sales outlook, with microchip designer ARM Holdings (ARM.L: ) up 4.1 percent.

Riding the coat tails of the chip sector gains, software firm Autonomy (AUTN.L: ) added 1.5 percent.

U.S. hotel operator Marriott International (MAR.N: ) will continue the earnings season after the Wall Street closing bell on Wednesday.

Drugmaker Shire (SHP.L: ) was a good blue-chip performer, up 1.8 percent, helped by a Credit Suisse upgrade to “outperform” from “neutral” with the broker saying the stock offers top-line growth at a reasonable price.

Travel firms Thomas Cook (TCG.L: ) and TUI Travel (TT.L: ) rose 1.9 and 1.7 percent respectively after RBS intiated coverage on both companies with “buy” ratings.

Compass Group (CPG.L: ), the world’s biggest caterer, added 1.5 percent as Citigroup started coverage of the firm with “buy.”

There was better news on the state of the UK economy on Wednesday, with the number of Britons claiming jobless benefit falling by slightly more than expected last month, official data showed.


ICAP (IAP.L: ) was the top blue-chip faller, down 5.1 percent after the world’s biggest interdealer broker reported volumes slowing significantly in June due to a cut in appetite for risk.

Banks were the worst performing blue-chip sector, dropping back after having seen big gains in the previous session, with Lloyds Banking Group (LLOY.L: ) losing 0.8 percent.

Integrated oils were weaker as BP (BP.L: ) shed 1.0 percent, having jumped 12.5 percent in the past two sessions. It delayed a critical test that will determine if it can close a cap atop its ruptured Macondo well that has leaked oil into the Gulf of Mexico for the last 12 weeks.

BAE Systems (BAES.L: ), Europe’s biggest arms contractor, fell 1.5 percent, hurt by a downgrade to “equal-weight” from “overweight” by Morgan Stanley, which cited sustained pressure on defense budgets.

(Editing by Michael Shields)

FTSE slips; weak banks, oils counter firm miners